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RCom Q4 net profit up 47%

PHOTO: PAUL NORONHA

STRONG GROWTH: Anil Ambani, Chairman, Reliance Communications, addressing a press conference in Mumbai on Wednesday. —

MUMBAI: Reliance Communications (RCom), part of the Anil Dhirubhai Ambani Group, reported a 47 per cent growth in its net profit at Rs. 1,503 crore for the quarter ended March 31, 2008. The turnover over the same period was up 35 per cent at Rs. 5,311 crore.

During the period, the company’s businesses posted healthy growth with the wireless business up 40 per cent at Rs. 4,161 crore, global business 18 per cent at Rs. 1,526 crore and broadband business 54.5 per cent at Rs. 510 crore. The operating profit was up 42 per cent at Rs. 2,316 crore and operating margins improved to 43.6 per cent.

For the financial year 2007-08, the company reported a 71 per cent higher net profit at Rs. 5,401 crore ($1.350 billion) on 32 per cent higher revenues of Rs. 19,068 crore. The operating profit was up 43.3 per cent at Rs. 8,199 crore with strong contributions from all its businesses. RCom had announced a capital expenditure plan of Rs. 45,000 crore over 2007-08 and 2008-09. It had already spent Rs. 21,000 crore and would spend the balance Rs. 25,000 crore ($6 billion) in the current year.

The company plans to list global subsidiary, Reliance GlobalComm, “if values and markets are right on the London Stock Exchange, said Anil Ambani, Chairman, RCom, while addressing the media.

RCom’s tower business subsidiary, Reliance Infratel, has filed its prospectus with the Securities and Exchange Board of India. “We are awaiting better market conditions. There have been positive developments such as allowing of active and passive sharing, issuing of new licences and spectrum allocation. The regulator’s recommendations on 3G and WiMax are attractive opportunities for Reliance Infratel.”

RCom at present operates GSM services through Reliance Telecom in eight circles and according to Mr. Ambani, “the numbers are encouraging and we have garnered a much higher market share than expected. We are adding four lakh customers a month.” For its remaining 15 circles, the company has placed electronics orders worth over $1 billion. The pan-India GSM roll-out will start at the end of this year and RCom will achieve coverage to all villages by end-2009.

The company has ventured into the information technology (IT) sector by creating Reliance Technology Services which will focus on specific verticals of telecommunications, financial services, media and entertainment and utilities. It will initially service group companies and later serve external companies.

The company is now testing its Direct to Home (DTH) product, Big TV, nationally. This service incorporates MPEG4 (Moving Picture Experts Group) and HDTV technologies and will be launched commercially soon.

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