HOME > BUSINESS > MTS India loss narrows on IUC cut, over 50% revenue now from data

MTS India loss narrows on IUC cut, over 50% revenue now from data

Sistema Shyam TeleServices Ltd. (SSTL), which operates its telecom services under the MTS brand in India, said its non-voice revenue have now started contributing over half, or 51.1%, of its total revenue in India.

With this, SSTL has become the first operator to achieve this milestone. Other operators such as Idea Cellular get only about 16% of their revenue from data, and about 80% from voice.

mts-india

However, the Russian-owned company continued to report heavy losses in its India operations.

Against a revenue of Rs 358 crore, the company had a net loss of 391 crore, indicating the high cost of operations. However, much of SSTL’s losses are caused by high interest charges.

Purely on an operational level, the company lost only Rs 130 crore during the first quarter of this year, compared to 157 crore that it lost a year earlier. The reduction in operational losses was aided by a cut in the interconnect charges halfway through the quarter.

The company’s average subscriber was spending about Rs 127 ($2) per month, up 4%.

Nearly all of the growth during the quarter came from MTS’ data services. The company’s data card subscriber base for the quarter was up 9.4% to 1.8 million subscribers.

As a percentage of total revenue, non-voice services jumped 4.2 percentage points from the same time a year ago.

SSTL was the first in India to upgrade its CDMA network to EVDO Rev B, which offers a data-speed of 4.9 Mbps on a 1.25 MHz channel. In comparison, 3G offers around 21 Mbps on a 5 MHz spectrum channel. MTS and RCom offer EVDO Rev B services with speeds of 9.8 or 14.7 Mbps, depending on the quantum of spectrum they are using.

MTS said its HSD services now cover over 850 towns across 9 circles.

Dmitry Shukov, Chief Executive Officer of Sistema Shyam Teleservices said he was looking forward to consolidation in the Indian telecom industry.

“Consolidation within the Indian telecom sector is bound to happen. The key catalysts now are the spectrum sharing and trading guidelines, which are expected to be issued by the Government. One hopes that clarity on such regulatory issues is received at the earliest,” he said.

Financial Summary:
INR Million Q1-2015 Q1-2014 Y-o-Y Q4-2014 Q-o-Q
Revenue 3,578 3,188 12% 3,508 2%
OIBDA -1,297 -975 -33% -1,567 17%
Margins -36% -31% -5 p.p. -45% 9 p.p.
Net Income -3,910 -3,162 -24% -4,814 18.8%
margins -109% -99% -10 p.p. -137% 28 p.p.

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