8/3/2019 Call Transcript RCOM 2QFY12
1/23
RELIANCECOMMUNICATIONS
LIMITED
Registeredoffice:HBlock,1stFloor,DhirubhaiAmbaniKnowledgeCity,NaviMumbai 400710
TranscriptofEarningsConferenceCallfortheQuarterendedSeptember30,2011
Conductedat12.00pmISTonNov14,2011
8/3/2019 Call Transcript RCOM 2QFY12
2/23
2
Operator:
Thankyou forstandingbyandwelcome toRelianceCommunicationsglobalearnings
conferencecallontheRelianceAudioConferencingplatform.
Thisis
Mamta,
the
moderator
for
this
conference.
At this time,all theparticipantsare in listenonlymode.Therewill beapresentation
followedbyaquestionandanswersessionatwhichtimeifyouwishtoaskaquestion,
pleasepress*1onyourtelephone.Pleasebeadvised,thisconferenceisbeingrecorded
today.
Today, we have the senior management from Reliance Communications to present
secondquarter,FY12financialresults.
The call will begin with some key observations by Mr. Syed Safawi followed by a
questionand
answer
session.
Imust
remind
you
that
the
overview
and
discussions
today may include some forwardlooking statements that must be viewed in
conjunctionwiththerisksthatthecompanyfaces.
IhandoverthecallnowtoMr.SyedSafawi.Thankyou.
SyedSafawi:
Thankyou,Mamta.
It isagreatpleasure toonceagainwelcomeallofyou to thisearningscall todiscuss
RelianceCommunications
financial
performance
for
the
quarter
ended
September
30th
2011.
IampleasedtosharethatRCOMhasbeenabletogrowitsrevenuesandtotaltrafficin
minutes,notwithstandinganoverallseasonallyweakquarterfortheindustryatlarge.
Keyhighlightsforthequarter:
Letmesharewithyouthekeyhighlightsofthequarter:
1. Revenue: RCOM wireless revenue has grown by 2.1% in Q2, amongst the highestrevenue
growth
in
the
industry
based
on
various
initiatives
undertaken
in
the
last
34quarters
RPM: RPM stood steady at a solid 44.7 paisa per minute, a growth of 0.5%;amongstthehighestintheindustryforthelast7consecutivequartersnow.
EBIDTA:RCOMEBIDTAmarginat31.8%,amongstthehighestintheindustry
8/3/2019 Call Transcript RCOM 2QFY12
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3
2. Free Cash Flow and debtmanagement: RCOM continues to be Free Cash Flowpositive in this quarter and this financial year would be the first full year of free
cashflowpositive.
Allmajorprojectshavebeen implementedandpeakcapex isbehindus.Allfuture
Capex
requirements
are
only
incremental
and
focused
on
network
quality,capacity,enterprisedatacenterandwirelessdatagrowth
Asyouareaware,wehaveredeemedFCCBofUSD500Mn inthepreviousquarter.Wearefullygeareduptorepaythefuturedebtmaturities(including
redemptionofFCCBworthUSD1.1BndueinMarch,2012)
Asalreadycommunicated,RCOMwasthefirstandonlyoperatortorefinanceits spectrum fees through ECB from China Development Bank. RCOM is
benefiting fromextendedLoanMaturityof10yearsresulting insubstantial
annualinterestcostsavingsofRs.500crore.
Reliance Infratel transaction is progressing well and an update to all ourstakeholderswillbesharedatanappropriatetime.
Asacompany,ouraimistoreducedebtsignificantlybyMarch,2013.FinancialPerformance:
Now, I would like to share some of the key highlights of the financial performance
duringthequarter:
Consolidated
Revenue
at
Rs.
5,040
crore,
up
2.0%
against
Rs.
4,940
crore
(q
o
q)
EBIDTAatRs.1,605croreagainstRs.1,602crore(qoq) EBIDTAmarginat31.8%isoneofthehighestintheindustry NetprofitofRs.252crore,up60%againstRs.157crore(qoq) Onthecapexfront,wehavespentRs.350croreduringQ2.
Let me now briefyou on someof the initiatives taken by RCOM, whichhave already
startedshowingpositiveimpactonRCOMsperformance:
1. Wire Free India: We continue to rapidly execute our Wirefree India vision,which was unveiled by our Chairman during the AGM in Sept10. We have
remainedcommittedtoputacceleratedefforts inenablingwirelessbroadband
across India. We have expanded our HSD Network and have quality HSD
coverageinalmost1,000townsupfrom65townsoneyearback.
8/3/2019 Call Transcript RCOM 2QFY12
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4
The presence of 3G in 333 towns in 13 circles (including Delhi, Mumbai and
Kolkata), along with the rapidly expanding Highspeed CDMA data network,
makes RCOM the only nationwide private operator to offer seamless Wireless
Broadband experience in over 1,300 top towns across the country as of
September30,2011includingkeymetros.
Combinethiswithourextensive1XDatapresenceofferinghighqualityinternet
connectivity in 20,000 towns; it positions RCOM extremely well to take
advantage of the rapid increase in data consumption across the country and
enabling our visionof a WireFree India. Wecurrently serve~2.1 Mnactive
customersonour3Gnetwork,highestintheindustry.
2. Asanintegralpartofour3GStrategy,wehadestablisheda3GInnovationLabwiththeobjectiveoffacilitatingthedevelopmentofmobileservice innovations
byofferingrealtimeproductdevelopmentalcapabilitiesto3rdpartydevelopers.
a. As part of that effort, we successfully launched R.apps the Reliancebrandedapplicationstore,havingmorethan50,000appsandgames.
b. WehavealsorefreshedRWorldthenextgenerationentertainmentportal makingitmoreuserfriendlyandwithfasterdownloads.
c. WewillbelaunchingournewVideoonDemandapplicationshortly,thatwillrenderacrossvariousdevicessuchashandsets,tablets,PC,etc.
3. To help develop the 3G ecosystem in India, we launched our proprietary 3GTablet in August 2011, Reliance 3G Tab an Androidbased Tablet at a very
attractiveprice
of
under
Rs
13,000,
enabling
our
customers
to
enjoy
afuturistic
3Gexperienceandexploreaworldofunlimitedpossibilities.Thisisabigstepin
the 3G revolution in India and we have seen huge acceptance and increasing
demandacrossallcities.RCOMhasalsotiedupwithNokia,Samsung,LG,Sony
EricssonandotherOEMsfor3GmodelswithattractiveMoneyBackandMobile
Internetbundlingofferstodrivethe3Gecosystem.
4. Inrecentpast,wedidamassiveBrandRefreshdrivetomakethebrandyouthandinnovationcentric.WearecontinuingthefocusonourBrandthroughtheTV
Campaigns that are onair andas we speak andwe are seeingvery significant
tractionofbrandindicators.
IndustryHighlights&RegulatoryDevelopments
DuringthefirsttwoquartersofFY12,theindustrysawsubduedcompetitiveintensityas
far as tariffs are concerned and recent tariff hikes by almost all the incumbents is a
reflection of the abating competitive pressure on pricing. As mentioned during first
quarters earnings call, we have also revised tariffs upwards in both GSM and CDMA
8/3/2019 Call Transcript RCOM 2QFY12
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5
owingtoinflationarypressuresoncost.Thiswillcertainlyhelptheindustryinachieving
pricingstabilityandimprovingtherevenuegrowthtrajectory.
Overall, inthe2ndquarter,thenewsubscriberacquisitionshavesloweddownforthe
Industry.The industry added22.47 million wireless subscribersas compared to 40.23
millionsubscribers
in
the
first
quarter
of
2011.
The
total
wireless
subscriber
base
as
on
30thSeptember2011standsat868.6million.
ForRCOMalso,subscriberacquisitionshavebeeninlinewiththeindustryinthesecond
quarter.Weadded3.82millionwirelesssubscribersinthequarter. ForRCOM,thetotal
subscriber count stands at 147.1 million subscribers, maintaining a share of 17% of
customers.
DraftNTP 2011
During the quarter, honorable Minister for Communications and Information
Technologyunveiled
the
Draft
of
New
Telecom
Policy
2011.
The
policy
has
avision
of
BroadbandonDemandandenvisages leveragingtelecom infrastructuretoenableall
citizens and businesses, to participate in the Internet and web economy thereby
ensuring equitable and inclusive development across the nation. The policy aims
towardsconvergencebetweentelecom,broadcastandITservices,networks,platforms,
technologies and overcome the existing segregation of licensing, registration and
regulatorymechanismsintheseareastoenhanceaffordability,increaseaccess,delivery
ofmultipleservicesandreducecost.
TRAIresponsetoDoTonSpectrumManagementandLicensingFramework
Growthin
the
telecom
sector
in
India
has
been
pragmatically
supported
by
government
policiesandregulatoryframework.Earlierthismonth,TRAIrespondedtoDepartmentof
Telecommunications on various issues related with Spectrum Management and
Licensing Framework including M&A rules and spectrum sharing. Most of the
recommendationsareforwardlooking&constructiveandwouldsurelybridgethegap
betweentheincumbentsandnewplayersbycreatingalevelplayingfield.
We believe that TRAI recommendation on M&A regulations are progressive and will
help consolidation in the industry. TRAI has confirmed that committed spectrum for
GSM is6.2MHzwhileforCDMA, it is5MHz.Thusoperatorscangetupto6.2MHzin
GSMaspartofcontractedspectrum.Thiswillsignificantlyreducenetworkcostfornew
GSMnetworks
like
RCOM
and
further
help
RCOM
in
improving
its
business
and
cash
flows. The additional spectrum will significantly enhance the quality of network and
consequently the customer experience. TRAI has made it clear that the priority for
releaseofspectrumshallbetothosewhohavereceivedinitialstartupspectrumhallof
4.4MHz.Inthisregard,RCOMleadsthequeue.
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AspertheTRAI,theLicenseeswithspectrumbeyond6.2MHZwillhavetopayonetime
excessspectrumcharges.WhileRCOMhasexcessspectrummerelyinonecircle(Bihar)
and that too negligible, incumbent GSM operators have excess spectrum in many
circles. Operatorswhohavespectrumbeyond6.2MHzhavetopayhugesumsasone
timeexcessspectrumcharges.
Letmenowsharewithyouthefinancialandoperationalperformanceofourwireless
business.
Wireless revenue for the quarter stands at Rs. 4,417 crore, against Rs. 4,327croreinQ1,upby2.1%
EBIDTAstandsatRs.1,176croreagainstRs.1,173crore OurRPMstoodathealthy44.7paisa,growthby0.5%(qoq),amongthehighest
in the industry. We have successfully arrested decline in RPM for the last 7
consecutivequarters
amidst
increasing
competition,
driven
by
focus
on
the
qualityofoperationsandrecenttariffincreasehashelpedfirmRPMsforRCOM
We have continued our increased focus on data: we now provide high speeddatacoverageinover1,300towns.
Weserve~2.1Mnactivecustomersthroughour3Gnetwork. Withthisfootprintandsuperiorqualitynetwork,RCOMistheclearleaderinthe
3Gdatamarketspaceandwouldcontinuetodrivethisconsistently.
For
the
last
8
quarters,
the
focus
has
been
to
build
Quality
of
Operations
through
initiatives focused on segmentation and cluster level profitability. As shared with you
duringthepreviousfewquarters,wecontinuetoremainfocusedonpaidminutes.The
focus on driving a quality portfolio driven by increase in nonvoice services has
continued. Our nonvoice revenue contribution to overall revenues is amongst the
highestintheindustry,atcloseto20%,wetargettodoublethecontributionfromnon
voiceinthenext2years.
AsImentionedearlier,wecontinuedwiththedisciplineweimposedonourselvesafew
quartersagobykeepingastrictleashonMoUgrowthwithoutcommensuraterevenue
growth,bynotinducingfreeminutesorFAT. ThishashelpedintheRPMforWireless
remaininghealthy
and
now
reaching
45p/min.
We
have
further
cleaned
up
our
non
profitableproductsandtightenedacquisitionnormstoensurehigherretentionpost90
daysanddeliverbettercustomer lifecyclevalue.Weare focusingonspecialprograms
towardsbuildingtheonnetcommunity. CDMAbusinessisakeyfocusareaforRCOM
and various programs/initiatives have been lined up for the same. We believe that
theseinitiativeswillhelpRCOMdrivesustainedprofitablerevenuegrowth.
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Reliance Communications is clearly focused on building a 'healthy portfolio mix',
throughdrivingprofitableDataandVASbusinessestherebyfutureproofingthebusiness
against voice led growth alone. This is in line with the trends in the Global telecom
marketsofbuildinga strongportfoliomix.BoththesesegmentsofDataandVASare
growingatahealthydoubledigitrate.Wewillcontinuethisfocusandalreadyhavethe
largest,
widest
and
deepestfootprint
of
3G
enabled
data
services
in
the
country,
providingspeedsupto28Mbps.Coupledwiththis,theHSDServicesthatwecurrently
provide inalmost1,000townsand1xacrossthecountry in20,000townsand600,000
villages. Together Data and VAS would continue to drive the Companys Wireless
businessgrowthgoingforward.
We have already seen tangible evidence of accelerating mobile data adoption where
consumersandbusinesscustomersareseizingthebenefitsoffast,reliablemobiledata
networksusingsmartphonesandothermobiledatadevicessuchasTablets.Aspartof
ourDataandDevicesRoadmap,RelianceCommunicationshaslauncheditsveryown3G
TabthefirstofitskindinitiativeintheindustrybyaserviceproviderinIndia.
These transformational changes are beginning to yield constant consumption led
revenuegrowth.
Letmenowcoverthenonwirelessbusinesses.
In our Global Enterprise Business Unit, we achieved revenue of Rs. 2,335 crore as
comparedtoRs.2,292croreinQ1,agrowthof1.9%andEBITDAofRs.569croreforthe
QuarterendingSeptember30,2011.
CarrierBusiness
Second quarter witnessed strong growth in Carrier businesss sales order booking as
wellasrevenue.WehavebookedsalesordersofRs417croreinQ2FY201112whichis
10%higherthanthesalesorderssignedinQ1.Theincreaseisdrivenbyrobustdemand
inEurope,MiddleEastandAsia.WehaverecentlyupgradedourFEA(FLAGEuropeAsia)
and FALCON cable system to add 400 GB of capacity on EuropeGulf loop. We have
increasedthecapacityofFEAby400%whichwillhelpuscatertoallfuturebandwidth
requirementsandtechnologicalimplementationsofourCarrierandISPcustomers.Sales
ontheupgradedrouteswillhelpusmaintainourleadershippositionintheVoice&Data
CarrierbusinessandatthesametimeestablishourleadershipintheCloudComputing,
Managed
Services
and
Application
Services
portfolio.
The InternationalVoicesegmentcontinued itsrobustgrowth;traffichasgrown34% in
Q2 on YoY basis to over 5 billion minutes. Our transit business has also grown
significantly and has clocked on an average more than 125 mn minute of traffic per
monthinQ2.Weareconfidentofsurpassingthe150mnminutespermonthoftransit
trafficbyendofFY1112.
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8
In the National Long Distance business, we signed orders of more than Rs 100 crore
primarilyfromBandwidthsalestoprivateserviceproviders.
EnterpriseBusiness
As
indicated
in
the
last
earnings
call
that
there
is
a
robust
demand
for
managed
services
andenterpriseoutsourcing;playingonthemarkettrendwehadabonanzaquarterwith
salesordersbookedofRs1,818crore,thehighlightofthesamewasthe largestData
Center outsourcing deal in India with the second largest private bank in India, HDFC,
worthRs1,400crorefor15years.Reliancewillbuildandoperatethe60,000sqftData
CenterforHDFCbankforaminimumContractperiodof15years.Inordertomeetthe
huge demand of Data Center space, we are building a new 350,000 sqft Data Center
facility inDAKC.Thephase Iof100,000sqftwillbeready in12monthsandcomplete
DataCentrewouldbereadyin24months.
In India, USA and Europe, we have received sales orders of over Rs 418 crore in Q2
FY201112.
Our
Q
oQ
success
in
the
government
vertical
continued
as
we
bagged
a
three year MCGM (Municipal Corporation of Greater Mumbai) project worth Rs 52.4
croreanda3yeardealwithDITMaharashtraGovernment.Wehaveacquiredseveral
othernewlogosintheEnterprisespacenotablebeing(i)largestmanufacturerofpaper
packagingproductsintheAsianregion,(ii)AEuropeanMotorinsurancecompanywith
operationsin7majorcountries,(iii)AGlobaltechnologyproductandservicescompany
with customers in automotive, mechanical engineering sectors (iv) Worlds largest
onlinepaymentsolutionscompanyandtheWorldslargestonlinemarketplace.
WeexpectstrongandcontinuedgrowthintheCarrierandEnterprisespacefromboth
India and outside India. A strong sales pipeline in the carrier business driven by an
increasingdemand
of
bandwidth
in
Europe,
Middle
East
and
Asia
will
drive
top
line
and
profitability.Indiabusinesswillcontinuetofocusonwinningkeyordersandprojectsin
itskeyverticals,theGovernmentandFinancialservices.
Conclusion:
Toconcludemyinitialcomments, Iwouldliketosaythatthesecondquarterhasbeen
very satisfactory given the background of seasonality in the industry. We are now a
servicebrandalreadyservingover150millioncustomers.
Tosummarise:
1. WirelessbusinessdeliveredastrongMoUgrowthof1.6%andrevenuegrowthof2.1%qoq,thirdconsistentconsumptionledquarterlyrevenuegrowth
2. WeareattheforefrontofcreatingWirefreeIndiabyofferingseamlesswirelessbroadbandexperience inover1,300 towns across the country. With20% of our
8/3/2019 Call Transcript RCOM 2QFY12
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revenuescomingfromnonvoice,wearethelargestdataplayerinthecountry. We
targettodoublethecontributionfromnonvoiceinthenext2years.
3. Wearedrivinggrowthofpaidminutesandcombinedwiththerecenttariffhike,weareabletogrowRPM
4. Maintaining healthy trend in our Global Enterprise business backed by robustdemandforbandwidth,managedservicesandenterpriseoutsourcing
5. Wecontinuetodeliverstrongmarginsat31.8%EBIDTAandareFCFpositiveforthequarterandwillbeFCFpositivefortheyear.
Thankyou.
AndIwouldnowliketohandyoubackfortheQ&As.
Operator:
Thankyou,sir.
WewillnowopenthecallforQ&A. Werequestallofyoutofocusonkeystrategicand
business issues. Wealsorequesteachparticipantnottoaskmorethantwoquestions
andprovideanopportunitytoalltheparticipantstointeractwiththemanagement.
Iwouldrepeat,atthistimeparticipantswhowishtoaskanyquestions,pleasepress*1
on your telephone keypad and wait for your name to be announced. If you wish to
canceltherequest,pleasepresshashorthepoundkey.
Firstin
line
we
have
question
from
Mr.
Sachin
Salgaonkar
from
Goldman
Sachs.
You
may
goaheadplease.
Mr.SachinSalgaonkar:
Hi,thankyouforthecall.Ihavetwoquestions.Firstly,Iwantedtounderstandwhynet
interest expense was lower so much on a QoQ basis. Also, could you help us
understandtheforeignexchange impactinthisquarteronP&LandBalanceSheetdue
tothe10%rupeedepreciation?Mysecondquestionison3G.Ofthe2.1millionactive
3Gsubscribers,howmanyofthemareontabletsandhowmanyofthemareonsmart
phones?Andwhereareyouseeingmoredemandasofnow,tabletsorsmartphones?
Mr.SyedSafawi:
Sachin,letmehandlethesecondquestionfirstandhandyoubacktoArvindforthefirst
one.The2.1millionactive3Gcustomersareacrossdevices.Theecosystemforhandset
is much larger. Tablets are an emerging category in India. Therefore, it would be
obviously smaller in terms of size. Majority of the current demand is from handsets
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10
ratherthantablets.Wewillnotknowhowthemarketevolvesbut,ifyouaretalkingof
850900 million total subscribers or 600 million unique customers, they are all on
handset.Astheyupgradetheirhandsetsto3Ghandsets,a largernumberwouldagain
cometohandsets.LetmehandyoubacktoArvindforthefirstquestion.
Mr.Arvind
Narang:
Hi,Sachin.Onyourquestionontheforexandthenet financecharges,pleasereferto
the notes to accounts where we have mentioned that pursuant to the scheme of
arrangement the company is permitted to adjust the variations on account of the
changes in the exchange rates related to loans in foreign currency by withdrawal or
credit to the General Reserves. And this necessary effect, whether it is positive or
negativewillbecarriedoutattheendoftheyear.
Mr.SachinSalgaonkar:
Sir,just
one
follow
up
question
on
my
first
part
on
tablets.
Currently,
RCOM
is
one
of
theveryfewoperatorsinIndiaofferingtablets.Whatistheapproximatemarketshare
RCOMishavingintablets?
Mr.SyedSafawi:
Sachin,itishigherthan20%ofallthetabletssoldinIndiaincludingiPad,Galaxytaband
everythingelse.
Mr.SachinSalgaonkar:
Got
it,
thank
you.
Operator:
Thank youSir.Next in line wehavequestion fromMr. Suresh Mahadevan fromUBS.
Youmaygoaheadplease.
Mr.SureshMahadevan:
Good afternoon and congratulations on a good set of numbers with both revenue
growthandminutesgrowth.IhaveonequestionregardingRCOMsaspirationrightnow
in terms of incremental market share. Tariff is one of the levers available to the
operators.Hence,whatisRCOMsaspirationontariffsandmarketshare?
Mr.SyedSafawi:
Wearepleasedwiththisquartersresult,beingconsistentoverthelastthreequarters,
driven by consumption led growth. This is a key driver for us. In the voice side, our
objectiveistodrivemarktomarketorhigherconsumptionledgrowthwithoutdiluting
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11
rateperminute.Wehavesaidthis foralmostsevenquartersthat,wewillkeepRPMs
firm.Weareat45paisanowandwemayseethepositiveimpactofalmost1paisaon
RPMfromtherecentpricehikeoverthenexttwotothreequarters.Thesecondleveris
onthedatasidewhereweareseeingsignificantgrowthgivenour1,300townsofhigh
speeddataand3G.Regardingtheincrementalrevenuemarketshare,wearetargetinga
minimum20%
incremental
RMS.
Simultaneously,
it
is
also
important
to
look
at
EBITDA
shareoftheindustrywhichisalsoourfocus.Wewanttobeaprofitableplayerandnot
onlyarevenueplayer.So,wewanttotargetmorethan20%profitshareoftheindustry
aswell.
Mr.SureshMahadevan:
ThankyouSyed.
Mr.SyedSafawi:
Thanks,Suresh.
Operator:
Thank you Sir. Next question comes from Mr. Rajiv Sharma from HSBC. You may go
aheadplease.
Mr.RajivSharma:
Thankyoufortheopportunity.Ihavegotacoupleofquestions.Firstoneis,Syedwhat
isthereasonthatinthisquartertherewasminutesdeclineacrossGSMoperators,but
RCOMs
total
traffic
has
grown?
And
second,
do
you
think
in
the
interim,
someone
like
Uninor,wholaunchedclosertoyouontheGSMside,startstakinghighershareoftraffic
wouldyougetworried?Andwouldyourability tobe firmontherevenueperminute
needacheck?Or,whatwouldchangeyourstandontheRPMfront?Lastly,whenisyour
spectrumrenewaldate,isit2021or2028?
Mr.SyedSafawi:
Rajiv,IwillansweryourfirsttwoquestionsonMOUsandRPMsfirst.Wehavesaidfor
the last seven quarters that we are not focused on minutes but on RPM. We need
profitabilityandeachminutehastobeprofitable.WehavenotletRPMsdropbelow44
paisaover
the
last
seven
quarters
and
we
do
not
intend
to
do
that.
There
will
always
be
somemarginalplayerswhowill try andplaya tariffgame.But it is notaboutpricing
alone.Itisalsoaboutthetotalnetworkexperienceandthecustomerexperiencebeing
offeredattherightvaluewhere,wehavenotseenanycompromise.Initially,whenwe
tookout freeminutesasadeliberatestrategyover the last fourquarters,RCOMsaw
slightly below marked to market growth in terms of MOU. Finally that discipline is
payingoffand todaywearegettingamuchhighershareofpaidminutesattheright
rate which is translating into the 2.1% consumption led growth. We are focused on
8/3/2019 Call Transcript RCOM 2QFY12
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12
driving this quality portfolio and quality of minutes. Onyour specific question on the
spectrumorthelicense,thisiscomingupnotbefore2020.
Mr.ArvindNarang:
We
got
GSM
spectrum
in
2008
for
all
issuance,
validity
is
20
years.
Also
I
would
like
to
add that currently the process of delinking the spectrum and licensing has been
undertakenbytheGovernment.Wewillkeepyouupdatedontheprogress.
Mr.RajivSharma:
Arvind,giventhepresentregulationwhatwouldbetherenewaldatesinceyougotyour
GSM spectrum on your CDMA license? So, will the current date on the present
regulationbe2021?
Mr.ArvindNarang:
ItisaUASLlicensewhichisupforrenewalaround20212022.Thespectrumsgivenarefor20yearvalidity.
Mr.RajivSharma:
Andmylastquestionisoncapitalworkinprogress(CWIP)whichhashalvedduringthis
quarter.However,thereisstillsomeRs.9,200croreleft.Whatistheremainingamount
andbywhattimethatwillgetcapitalized?
Mr.ArvindNarang:
Rajiv,we
had
mentioned
in
the
last
quarter
that
you
will
see
asignificant
reduction,
once the 3G license fees and related assets are capitalized. Secondly there is part of
CWIPintheRelianceInfratelwherewehavenotincreasednumberoftowersrelatively
in the last 34 quarters as the overall landscape of tower industry has changed.
Additionally,CWIPrelatedtoglobalassetsalsoexists.
Mr.RajivSharma:
Okay,thankyousomuch.
Operator:
ThankyouSir.NextquestioncomesfromMr.SrinivasRaofromDeutscheBank.Youmay
goaheadplease.
Mr.SrinivasRao:
Ijustwanted toask twoquestions.First is, in theEnterprisebusiness therehasbeen
commentary over the last couple of quarters in terms of increasing sales and new
8/3/2019 Call Transcript RCOM 2QFY12
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13
clients.Butifyoulookataslightlylongerterm,neithertherevenuenortheEBITDAlevel
hasgone up. And Icontrast this with some smaller players likeTulipwho has seena
discernible increase in its revenue and EBITDA run rate. Second is, over the last 12
months,yournetworkcosthasnotgoneupbuttheemployeecost,hasactuallybeen
flattofallingwhichseemssurprisinggiventhelevelofinflationbothforfuelandwages.
Mr.SyedSafawi:
Srinivas, let mejust answer the second part and hand over to Punit to discuss the
Enterprise business. We have always said that we are driving a lot of efficiency in
network cost. The QoQ initiatives like State Electricity Board (SEB) connectivity and
alsoinitiativesintermsofdieselconsumptionarehelpingus.TodayourSEBconnectivity
is among the highest in the industry. We have driven it as a project and therefore,
despitenewnetworkrolloutwehavemanagedtocontainournetworkcost.Theslight
increasethisquarterofapproximatelyRs.40croreisbecauseofnewrolloutsthathave
happenedin3G.Intheemployeecost,duetorightsizingandredimensioning,thereisa
Rs.22
crore
decrease
on
Q
oQ
basis,
and
this
trend
is
going
to
continue.
The
employee
costsmaycomedown furtheroverthenextcoupleofquarters.Networkcostsshould
notgoupbecausewearecontainingthefuelconsumptionverytightly.Letmejusthand
overtoPunitforyourfirstquestion.
Mr.PunitGarg:
Thanks,Syed.Srinivas,inthelastquarterofthelastfiscalyear,therewasanaccounting
policy change on IRU treatment. As a result, the way IRU revenue and EBITDA were
treatedearlier,thosebenefitsarenotavailablefromQ1onwardsofthisfiscalyear.To
thatextenttherewouldbeadip.Butwearestillabletomaintainandgrow,mainlydue
toEnterprise
orders
which
are
acting
as
monthly
recurring
revenue,
and
are
also
flowing
intothebottomline.
Mr.SrinivasRao:
Fair enough. And Sir, I wanted to ask you regarding the HDFC order. I thought that
RCOMhadexistingcapacityorsparefloorspaceavailablefordatacenterorthatisnot
thecase?Isitthereasonwhyyouarebuildingacompletelynewoutsourcedatacenter
forHDFC?
Mr.PunitGarg:
Srinivas,thedatacenterswhichwehave inMumbaiarealmostfull.Mumbaihasbeen
the strongest growth region for RCOMs data center business. Our additional data
center isessentiallycoming tomeetourgrowingdemand inMumbaiand that isalso
where the HDFCs outsourcing of the data center would be housed. Regarding your
questionthat,isHDFCanexistingcustomerofReliance?Theansweris,Yes.Theyareon
allfront,whetheritisforthewireless,orthedataconnectivityorvoiceconnectivityor
8/3/2019 Call Transcript RCOM 2QFY12
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14
data center connectivity. But this particular order is like an outsourcing deal of data
center they have done, rather than taking a service which is on a monthly recurring
revenuebasis
Mr.SrinivasRao:
Sir,thepaymentisonapermonthbasisoryearlybasis?
Mr.PunitGarg:
Srinivas,letusnotdiscussthecontractualtermshere.
Mr.SrinivasRao:
OK,Iunderstand.ThanksalotSir,thisishelpful.
Operator:
ThankyouSir.NextquestioncomesfromMs.MalvikaGuptafromJ.P.Morgan.Youmay
goaheadplease.
Ms.MalvikaGupta:
Thankyoufortakingmyquestions.Ihaveacoupleofquestions.Ijustwantedtoclarify
aboutthe2.1millionactive3Gsubs,whetherthatcomparestothe2millionreported
lastquarteror toadifferentnumber?Mysecondquestion isonSG&Aexpenses,just
lookingforlittleclaritythere,giventheQoQincrease.Thirdone,isabouttheminutes
growthbeingabovetheindustry.Istheearlierexerciseofremovingfreeminutes,now
helping?And
lastly
on
tax,
could
you
give
us
an
indication
on
full
year
tax
expense?
Mr.SyedSafawi:
Malvika, Iwillhandlethe firstthreeandthenhandovertoArvind for the fourthone.
The2.1millionareactivecustomersonthe3Gnetwork.Untillastquartertheindustry
reported total3Gcustomers.Thisquarteronwards the industryhas started reporting
active customers as well. So, we have started reporting active customers and will
continuetoreportactivecustomershenceforth.Duringthe lastquarter,2millionwas
totalcustomers,andnotactivecustomers.Thisquarter,2.1million isactivecustomer
base,so it isnotliketolikecomparisontoansweryourquestion.This isamuchmore
aggressive number, and active customers are better number to track. On the SG&A
expenses,wehave increasedsomeofourTVcommercialsoverthe lastthreemonths.
Thisisthefullquarterimpactofthethreecampaignsthatwearerunning,on3G,high
speeddata,aswellasvoice.Therefore theSG&Aexpensesarehigher.Going forward
theyshouldbesustainedandshouldnotbegoingupbeyondtheselevels.OntheMOU,
youareabsolutelyright.Thedisciplineoftakingoutfreeminuteshashelpedus.Wesaid
it will take three to four quarters and we are at the fourth quarter now, so that has
8/3/2019 Call Transcript RCOM 2QFY12
15/23
15
reallyhelpedus indrivingpaidminutegrowth.That isclearly the trend thatwehave
seenand1.6%totalMOUgrowthinthisquarterispartofthatexerciseaswell.Letme
handovertoArvindforthetax.
Mr.ArvindNarang:
Malvika,Iwillnotbeabletogiveyoutaxguidancebutyouhavetheactualdatapoints
onforthelastmanyquarters.Thecompanyisentitledforexemptionundersection80
I(A)commencingfromassessmentyear200809,whichwillcontinue.
Ms.MalvikaGupta:
Okay,thankyou.Wouldyoubeabletoindicatetousthepercentageofyoursubscribers
thatareactuallyactiveon3G,whetheritisthe2530%wearehearingfortheindustry
orwhetheritisadifferentnumber?
Mr.
Syed
Safawi:
Itwillbeahighernumber.Wewillnotbegivingthisnumberbecausenowweareonly
goingtoreportactivecustomers.Thatiswhatwearefocusedonrightnow. WhatIcan
tellyouis,2.1millionisthehighestnumberofactive3Gcustomersintheindustry,and
thatisaverygooddatapointtostart.
Ms.MalvikaGupta:
Okay,thankyouverymuch.
Mr.SyedSafawi:
Thanks,Malvika.
Operator:
Thankyoumadam.NextquestioncomesfromMr.VinayJaisinghfromMorganStanley.
Youmaygoaheadplease.
Mr.VinayJaisingh:
Thankyousomuch.Ihavetwoquestions.OnetoSyed,Whatdoyouthinkabouttraffic
growth,for
the
industry,
for
the
next
two
to
three
quarters,
this
quarter
being
adull
quarter which went by? The second question is on cash flows, RCOMs convertible
bondsarecomingupforpaymentinthenext12months.Howdoyouplantofundthat
consideringthecurrentcashflow,netofCapexandinterestcostthisquarter?Youmay
need to raise money or probably sell towers about which you have been talking for
sometime.Anyupdateonhowyouwillfundtherepaymentofconvertiblebond?
8/3/2019 Call Transcript RCOM 2QFY12
16/23
16
Mr.SyedSafawi:
Letmeanswerthefirstone.IntermsofMOUgrowth,IthinkQ2isatypicallyseasonal
quarterandmostof the industryparticipants saw the impact.Luckily,givenourearly
initiatives,wewereabletodrivegoodaggressivegrowth.WeseefromQ3onwards,this
typicallybeing
afestive
quarter,
consumption
coming
back.
Ido
not
think
the
industry
sawanylackofelasticitybecauseoftariffhike,andthatiswhatpeopleareconjecturing.
Wemanaged to takeprice increaseaswellasdrive trafficup. Iamnotsurewhether
theywillgoback to810% levelsQoQbut, theywilldefinitelycomeback todecent
levels for the industry. And we will like to be marked to market or be higher on
consumptionledgrowth.IntermsofthecashflowsandthelikelyFCCBredemption,the
redemptioniscomingupinMarch2012foraboutUS$1.1billion.Vinay,ifyouseeour
EBITDA,wearegeneratingapproximatelyRs.1,600croreplusofEBIDTAeveryquarter,
andgiventhatourpeakCapexisbehindus,ourguidanceisRs.1,500croreforthisyear.
WehavedoneaboutRs.350croreofCapexinQ2andaboutRs.360croreinQ1ofthis
fiscalyear.So,weareverymuchontrackandwearegeneratingenoughfreecashflows
QoQ
to
be
able
to
manage
the
FCCB
redemption
from
internal
accruals.
Also,
we
do
notseeanymajorissuesgoingforwardonthisredemptionaswell.
Mr.VinayJaisingh:
Syed,ifyouusethecurrentquartersnumbersaswell;usetheRs.1,600croreEBITDA,
usethe interestcostnumber,aswellastheCapex forthisquarter,yougetnetofRs.
600crorecoming in.Rs.600650croremultipliedby3or4dependingonhowmany
quartersyouwanttomoveon,youstillhaveUS$1.1billiontopay.Youwillhaveagap,
unlessyoudonotplantospendanyCapexornotpayanyinterestforaquarter.
Mr.Syed
Safawi:
Our interestcostsarecomingdownbyaboutRs.500croreonannualizedbasiswhich
we shared last time because of the CDB 10year maturity loan and couple of other
transactionsthatwehavedone.SecondisourcapitalexpenditureisataboutaRs.1,500
crore level, quarterly Rs. 300350 crore. Considering these combinations as well as
improvingoperatingperformanceandconsistentlydeliveringfreecashflows,wearein
the ballpark Vinay. Hence it is very difficult to predict five months before, the exact
quantumthatyoumayneedoryoumaynotneed.
Mr.
Vinay
Jaisingh:
In case there is a need then do you have easy access to some debt or would you
drawdown?
8/3/2019 Call Transcript RCOM 2QFY12
17/23
17
Mr.SyedSafawi:
Vinay,wewillcrossthatbridgeonlyifrequired.ButatthispointintimeIcantellyouwe
havejustredeemedhalfabilliondollarsinMayandwewillbeoncoursetoredeemthe
nextoneaswell.Idonotthinkweshouldbestressedaboutit.
Mr.VinayJaisingh:
One lastquestion. If you look at the Others segment, the losses in theEBIDTA is still
significantly high around Rs. 140 crore. Any thoughts of how that goes down to zero
becausethatiswhereyourEBITDAgoesupbythesameamount?
Mr.SyedSafawi:
Vinay, the Others segment constitutes largely DTH business, Reliance World Stores,
RelianceTechServicesand soon.DTHbusinesscontinues togrowandwehaveseen
some
of
the
examples
in
the
industry
at
what
ballpark
number
they
start
having
positive
EBITDA.SodirectionallyitisEBITDAnegativeatthispointoftime,butoverthenextfew
quartersitshouldsignificantlyimprove.
Mr.VinayJaisingh:
Thankyou.
Mr.SyedSafawi:
ThanksVinay.
Operator:
ThankyouSir.NextquestioncomesfromMs.ReenaVermafromMerillLynch.Youmay
goaheadplease.
Ms.ReenaVerma:
Thank you very much for the call. I have some housekeeping questions on your
quarterly results andjust a few more. Firstly,just pertaining to the results, can you
comment on how your paid minutes did versus last quarter, so that we can have a
clearerpictureonseasonality?Andmysecondquestionagainrelatingtoresultsis,the
reductionin
your
CWIP
you
said
is
due
to
3G
getting
commercialized.
So,
have
we
seen
thefullimpactofthatoninterestaswell?WhatisVASasapercentageofrevenue?Can
you please share with us what was the number in the previous quarter in 1Q FY12?
ThosearemyresultrelatedquestionsandIhaveonemorequestionforyouplease.
8/3/2019 Call Transcript RCOM 2QFY12
18/23
18
Mr.SyedSafawi:
Let me try and answer your questions on MOU and nonvoice VAS. Yes, this is paid
minutesgrowththatwearelookingat.Ihadmentionedfourquartersbackthatoverthe
nextthreefourquarterswewilltakeoutfreeminutes.Currentlyfreeminutesaredown
tosmaller
level
which
Ithink
is
lower
than
the
industry
right
now,
as
well
as
the
exact
details across the industry might not be available. If you see the mathematics, 1.6%
minutesgrowth,0.5%RPMgrowthoveralltranslatesintoa2.1%growthofrevenue.You
shouldseeconsistentpaidminutegrowthfromhereon.
Ms.ReenaVerma:
Asmallclarification,isthatintotalminuteterms?Werethefreeminutesarelativelybig
numberinQ1thatyouescapedtheseasonalitywhichhurtotheroperators?
Mr.SyedSafawi:
Iamnotsurewhether Iamqualifiedtoansweronbehalfoftheotheroperators.Ican
answeronmybehalfthatwehavecontinuouslyfocusedontakingoutfreeminutesover
thelastfourquarters.WearenowatalevelwherethefreeminutesorFATisatavery
marginal level and therefore you are seeing whatever minutes you are generating.
WhenIsaidfreeminutesReenaIhavealwayssaidthatevenlossmakingminutesneed
to be reduced. Therefore today you are seeing more profitable minutes getting
generated at 45 paisa RPM and that is what is translating into revenue growth.
Managingaportfolio ofbillionminutes aday, takingout freeminutes, reducingnon
profitable minutes and increasing the share of paid minutes, is a complex portfolio
management.ItisnotasimpleanswerofXpercentbutacombinationofallthesethings
whichresult
into
MOU
growth
and
therefore
the
revenue
growth.
Let
me
come
to
your
VAS or nonvoice revenue question. Our nonvoice revenue is about 20% of total
revenuewhichisthehighestintheindustrybyasignificantamount.Itwasslightlylower
than20%inthelastquarter.
Ms.ReenaVerma:
Sir, in terms of the premium that your RPM enjoys, your RPM is higher versus the
market leader.DoyouseethatasbeingsustainablegiventhatyourVASwasmoreor
lessstable?
Mr.Syed
Safawi:
Yes, we have seen it stable for the last seven quarters. We focused and deliberately
managedtheportfolioinawaywherewedidnotletitdrop.Themomentwesee loss
makingminutesgettinggeneratedorlossmakingdataplans,weimmediatelyfocuson
that. We want to drive customer life cycle value as a way of life, and that focus has
helpedus translating into thisgrowth. Itwill always beablended number. The same
8/3/2019 Call Transcript RCOM 2QFY12
19/23
19
blended number six to eight quarters back used to be at 44 paisa RPM. And in the
industry,someoftheplayerswereat53to54paisa.Nowitisreverse.Wehaveheldon
steadfastedlywhiletheotherplayersarenowprobablyat42/43/44paisa levels. It is
howmuchyoufocusonRPMsandpaidminutesandpaiddata.
Ms.Reena
Verma:
Thank you for that. I think you had a great call on the RPM convergence across
operators a couple of quarters ago. That has completely panned out as you said it
would. But now when I look at your overall RPM, you are now at a premium to the
market leader. I do not think we see it in too many markets globally that the
challengers RPM is higher than the market leaders. So, do you think that we should
expectatrendreversalagainstwhatwehavebeenseeingoverthelastfewquarters?
Mr.SyedSafawi:
Absolutelynot,
because
first
of
all
the
full
impact
of
the
tariff
increase
in
voice
has
still
pannedoutandthatIjustmentionedprobably20minutesbackthatitisgoingtohave
an impact of one paisa on RPM over the next two to three quarters. Currently the
impact isaround0.2paisa.That isstillto flow ingiventheblendthatwehave inour
portfolio with increasing post paid customers. We did not have this earlier which is
driving better quality of minutes and higher end customers. As we are getting 3G in
mostofthetowns,wearegettingamuchbetterpostpaidbaseaswellwhichwedid
nothaveearlieronGSM. It isacombinationofall these factorswhich is resulting in
betterandsteadyRPM. Today,ifyouareat44.745paisaandtheotherplayersinthe
industryarealsoat4344paisa,youareinthesamerange.Butitwillbeyourqualityof
portfoliooryourportfoliomixthatwilldeterminewhetheryoucanretainit.Andgiven
ourhealthy
and
changing
portfolio
mix
we
think
it
will
sustain.
One
is
RPM
increase,
second is nonvoice which is a more profitable part of the business going up further
from20%levelsto3540%levels,whichisglobaltrendagain.Ithinkthisissustainable
attheselevels.
Ms.ReenaVerma:
On3Gcapitalization?
Mr.ArvindNarang:
Wehave
full
impact
of
3G
in
fixed
assets
and
we
also
have
impact
of
depreciation
and
interest intheP&L.Variouscircleshavebeen includedatvariouspointoftimeduring
the quarter mostly in August and September, so accordingly the net effect has been
taken.
8/3/2019 Call Transcript RCOM 2QFY12
20/23
20
Ms.ReenaVerma:
Thank you very much. Ijust have one final question which is the news about the
imminententryofReliance Industries intotelecom.Doyousee itoverallasapositive
foryourselfgiventhatyoumighthaveatenantordoyouseeitasaconcerngiventhat
thereis
anew
competitor
on
board?
Mr.SyedSafawi:
If there is any responsible player coming into the industry and growing the business
especiallybydata,itisverygoodnews.Thisisbecauseweareatveryearlystagesofthe
datarevolutionandwehavealwayssaidthis isgoingtobethedecadeofdata.Given
thefactthatspectrum is limited, in5MHz, in3Gandalso inLTE,playersaregoingto
haveasmallerfootprintofsize,everybodyisgoingtoberesponsibleinthedataplay.If
anewplayercomes inandoverthenexttwotofouryearsbuildsanecosystemwhich
drives data revolution, it will be positive for the industry. On the tenancy side, if we
havetenancies
coming
in
that
will
be
anet
benefit
for
us.
Ms.ReenaVerma:
Sir,havethetalkscommencedfortenancy?
Mr.SyedSafawi:
Yes,thetalkshavecommenced.
Ms.ReenaVerma:
Thankyou.
Operator:
Thank you madam. Next question comes from Mr. Gaurav Malhotra from Citi Group.
Youmaygoaheadplease.
Mr.GauravMalhotra:
Most of my questions have been answered. I have only one question. Despite the
increaseinminutestheaccesschargeseemstohavegonedown.Whatisthereason?
Mr.ArvindNarang:
Gaurav,accesschargeshavecomedownmarginallyfromRs.668croreinQ1toRs.651
crore inQ2,orbyjustRs.17crore. This isduetothereductionofoffnetMOUsand
relatedterminationcharges.
8/3/2019 Call Transcript RCOM 2QFY12
21/23
21
Mr.SyedSafawi:
Gaurav, it isalwaysablendednumberbetweenonnetandoffnetandwehavealso
said intheearningscallthatwearedrivingconsciouslyononnetcommunity.Andas
thecommunitybecomes147to150million,theonnetminutesincrease.Alsothefact
thatdata
is
growing
very
well,
in
all
it
is
ablended
number
combination.
Mr.GauravMalhotra:
ThankyouSir.
Operator:
ThankyouMr.GauravMalhotra.NextquestioncomesfromMr.SunilThirumalaifrom
CreditSuisse.Youmaygoaheadplease.
Mr.SunilThirumalai:
Mostofmyquestionshavebeenanswered.Justafollowupquestion,Ididnotcatchthe
reason behind the reduction in the finance charges despite the 3G number getting
included.
Mr.ArvindNarang:
Sunil,as Imentionedearlier,wehavementioned inournotestoaccountsaswell,the
treatment related to foreign exchange. Because of the scheme of arrangement the
company is permitted to adjust the variations on account of the changes in the
exchangeratesrelatedto loans inforeigncurrencybyawithdrawalorcreditfromthe
GeneralReserves. And thisnecessary effect, whether it ispositive ornegativewillbecarriedoutattheendoftheyear.
Mr.SunilThirumalai:
Okay,sure.Thankyou.
Operator:
Thank you Sir. Next in line we have a question from Mr. Shobhit Khare from Motilal
Oswal.Youmaygoaheadplease.
Mr.ShobhitKhare:
Good afternoon Sir, and thanks for the opportunity. I had a couple ofquestions. The
paid minutes focus is also visible in your wireless net revenues. In the last three
quarters, it has gone up almost by 46% every quarter, but the same has not flown
throughon the EBITDA line.Thus thewireless EBITDAhasbeenalmostat the similar
8/3/2019 Call Transcript RCOM 2QFY12
22/23
22
levelaroundRs.1,180croreforthelastthreequarters.Whatisthisincreaseinwireless
operatingexpensesbelowthenetrevenueline?Arethereanyoneoffs,isitrelatedto
somewriteoffs,etc.?Andsecondis,thegrossdebtnumberinthequarterlyreportand
then the loans which are reported in the stock exchange, there is a meaningful
differenceofaroundRs.7,000crore.Whatisdrivingthisdifference?
Mr.SyedSafawi:
Shobhit,letmehandletheMOUoneandtheEBITDAimpactonthat.Yes,indeedweare
seeing good paid minutes growth which is helping in the top line growth of 23%
consistently for the last three quarters.TheEBITDAbeing marginallygrowingonly by
0.2%,asyourightlysaid, isbecauseofSG&Aexpensesgoingup inthisquarter.This is
because of the full quarter impact of the three advertising campaigns that we are
running,focusedonbranding.Thesecondoneisthe3Gnetworkfullyrolledoutinthe
fullquarterimpactandthenetworkcostgoingupa littlebit.Despitethefactthatour
employeecostshavecomedownbyRs.22crore,thesearethetwo itemswhichhave
goneup.
This
is
sustainable
and
it
can
improve
as
your
top
line
improves
given
better
RPMsandMOUgrowth.LetmejusthandovertoArvindforthegrossdebtquestion.
Mr.ArvindNarang:
Shobhit,thenumbersmentioned inthenotestoaccountsversus inthebalancesheet
will not match because that notes to accounts is relevant to the scheme of
arrangement. So, if you look at the foreign exchange loan mentioned in the balance
sheet, that loan amount is Rs. 26,184 crore. The relevant forex impact which is
mentioned in the notes to accounts is Rs. 2,714 crore. There is also buyers credit
involved which is there in our annual report, in the range of around Rs. 1,100 crore,
whichis
apublished
number.
If
you
take
all
these
into
consideration
and
reconcile
them,
youwillgettheforeigncurrencyloanamountofRs.29,961crorewhichismentionedin
thenotestoaccounts.
Mr.ShobhitKhare:
Okay,Sir,howmuchofthebuyerscreditwouldbethereapartfromthenumberwhich
isinthequarterlyreport?ItusedtobearoundRs.4,000toRs.5,000crore.
Mr.ArvindNarang:
Buyerscredit
is
apart
of
the
current
liability
in
the
quarterly
report.
The
amount
mentioned i.e. Rs. 1,100 crore is an approximate amount which is mentioned in the
annualreportandisapartofthecurrentliabilityinquarterlyreport.
Mr.ShobhitKhare:
Okay sure Sir. Finally what is the data incremental ARPU RCOM is getting on the 2.1
millionactive3Gsubscribers?
8/3/2019 Call Transcript RCOM 2QFY12
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23
Mr.SyedSafawi:
Shobhit, it isdifficulttotalkaboutspecificARPUsoneverysegment,but itsufficesto
saythatthedataARPUswouldbetypicallythreetofourtimesofvoiceARPUsonalike
tolike,prepaidtoprepaidorpostpaidtopostpaidbasis.Postpaidwouldbesimilaror
slightlyhigher
than
prepaid.
Mr.ShobhitKhare:
OkaySir.Okay,thanksalot.
Mr.SyedSafawi:
ThankyouverymuchShobhit.
Operator:
Thankyou
Sir.
At
this
time
there
are
no
further
questions
from
the
participants.
That
does conclude our conference for today. Thank you for participating. You may all
disconnectnow.