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SSTL Q1 net loss widens to Rs. 643.9 crore

SSTL Q1 net loss widens to Rs. 643.9 crore

By Press Trust Of India | Updated: 27 May 2013 18:52 IST

Telecom operator Sistema Shyam Teleservices (SSTL), which recently acquired fresh spectrum to continue operations in India, today reported widening of net loss at Rs. 643.9 crore for the first quarter ended March 31, 2013. The company had posted a net loss of Rs. 527.8 crore in the same period a year ago.

SSTL, which provides services under brand name of MTS, was required to win spectrum in March auctions to continue operations in service area where it wanted to operate following cancellation of its 21 out of 22 permits by the Supreme Court in February 2012.

The company during the quarter won fresh spectrum only in eight circles -- Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) & West Bengal -- for Rs. 3,639 crore. The company is eligible to adjust Rs. 1,626 crore from this amount, as per the government's decision, which it paid for the quashed licence.

SSTL's President and Chief Executive Officer Vsevolod Rozanov said the company invested Rs. 36.4 crore during the first quarter of 2013 while debt from banks and financial institutions for the firm at the end of March 2013 stood at Rs. 4,628 crore.

The net income of the company on quarterly basis, however, improved by around 17 percent from net loss of Rs. 778.7 crore it posted during the quarter ended December 31, 2012.

"SSTL's net income during the quarter improved by 17 percent quarter-on-quarter. The net income benefited due to improvement in OIBDA (Operating Income Before Depreciation and Amortisation)," Rozanov said here.

OIBDA loss of company narrowed to Rs. 211.3 crore during the reported quarter from Rs. 362.1 crore posted in the year-ago period.

Rozanov said this was lowest quarterly OIBDA loss recorded by company in the last three years as a result of cost optimisation, strict control over marketing and other expenditures and "on account of operational efficiencies".

The OIBDA loss had stood at Rs. 278.6 crore in the previous quarter. The consolidated revenue of the company during the first quarter of 2013 also declined by 13.55 percent at Rs. 352 crore from Rs. 407.2 crore it posted in the corresponding quarter of 2012.

"Revenue decrease was largely driven by closure of 13 circles, overall licence uncertainties and new regulatory requirements for customer registration. Moreover, the number of subscribers was further impacted due to strict control over sales and marketing expenditures, aggressive tariffs and market competition," Rozanov said.

SSTL's mobile subscriber base declined by 20 percent quarter-on-quarter and reached 1.19 crore by March-end.

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