The Hindu Business Line : Reliance Comm net rises 47% on business growth

Mumbai, April 30 Healthy growth across business segments, coupled with an expanded subscriber base, has propelled Reliance Communications to record a 46.8 per cent rise in net profit for the quarter ended March 2008.

The after-tax profit increased to Rs 1,503 crore from Rs 1,024 crore in the year-ago period. Net revenues for the quarter were up by 35 per cent at Rs 5,311 crore (Rs 3,937).

The company reported the maximum growth in its broadband business, which grew by 54.5 per cent to Rs 510 crore from Rs 330 crore. “RCom had a record year and we are confident of improved performance in the future,” said Mr Anil Ambani, Chairman, RCom. Responding to reporters query, Mr Ambani said the company incurred a mark-to-market loss of only Rs 18 crore in foreign exchange derivative transactions for the quarter.

“We have disappointed many experts who thought that our forex losses could be anywhere upward of Rs 300 crore, Mr Ambani said. RCom imports equipment for its telecom business and hence it employs a proactive hedging strategy to counter the currency movements.

GSM roll-out

RCom will complete its GSM network expansion programme in the next 12-18 months. “We will begin roll-outs in select cities by the year-end; by next year we will have a nationwide GSM network,” said Mr Ambani. Currently, the company provides GSM services in eight circles of the country. RCom is the only mobile operator in the country to offer both CDMA and GSM services.

Reacting to questions on the new round of tariff wars between mobile operators, Mr Ambani said, “the fun is just about to begin for customers,’ adding that new mobile operators have an uphill task going forward.

“Any new telecom player will take at least 3-5 years to achieve a nationwide presence. Moreover, they will a capex of Rs 35,000-Rs 50,000 crore,” said Mr Ambani.

Later, at an analyst call, Mr Ambani said that the company would add about one million sq ft of space every year to its data centre operations.

For the year ended March 2008, RCom’s net profit grew by 70.8 per cent to Rs 5401 crore (Rs 3163 crore), turnover was up by 31.8 per cent to Rs 19,068 crore (Rs 14,468 crore)

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