The Hindu Business Line : `Reliance Infocomm no longer needs parent for funds'

RELIANCE Infocomm has achieved cash profit for the financial year ended March 31, 2004, although the net loss appropriated on account of it by mother company Reliance Industries stands at Rs 265 crore for the year.

Reliance Infocomm will no longer require funds from Reliance Industries Ltd which has invested Rs 12,000 crore in the former so far, Rs 8,100 of that as preferential shares, said Mr Anil Ambani, Vice-Chairman and Managing Director, Reliance Industries.

These are redeemable or convertible into equity.

The telecom company will now be able to charge ahead on its own resources consisting of its own cash flows and through its ability to raise debt, he said.

There was no possibility of Reliance Infocomm accessing the capital markets any time in the near future, but conceded that several investors had asked for private equity placement from the company, "but as of now, we have nothing to announce on that".

Going ahead, the agenda consists of expanding the Reliance IndiaMobile service to 5000 cities (from the existing 1100) by the end of the current financial year. Capacity will be augmented to 40 million from the current seven million, he said. The company's much-talked-about broadband operations will be launched some time by the end of this year.

There are seven million Reliance IndiaMobile customers whose average talk time is 342 minutes a month and who generate an average revenue per user of Rs 523 a month.

The churn rate is low, at 2.7 per cent, said Mr Ambani.

Reliance Infocomm now has a 22 per cent share of the wireless market; its entertainment and data services, R-World records 35 million hits per day and there are 3 lakh Reliance IndiaMobile Internet users getting access speeds of up to 144 kbps.

The company has also acquired a 20 per cent market share of the in-bound international voice traffic, said Mr Ambani.