Uninor Posts Widening Q4 Operating Loss, First Annual Operating Profit

Uninor Posts Widening Q4 Operating Loss, First Annual Operating Profit
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Telecom operator Uninor on Wednesday reported widening of operating loss to about Rs. 276 crores in the fourth quarter ended December 31.

However, it posted first-ever annual operating profit at about Rs. 855 crores.

The company, which is now fully owned by Norwegian telecom operator Telenor, had reported operating loss of about Rs. 132 crores in the October-December quarter of 2013.

Uninor, however, did not share the net earnings figure. Telenor President and CEO Jon Fredrik Baksaas attributed the widening of loss to increase in operational expenditure, mainly to meeting the target of installing 5,000 mobile sites last year which was delayed due to the rains in the country.

Uninor has permit for mobile services in 7 out of 22 telecom service areas in India. Currently, it is operating in six areas - Andhra Pradesh, Bihar, Gujarat, Maharashtra, Uttar Prdesh East and West.

The revenue of the company increased by 38 percent to about Rs. 1,151 crores in the last quarter, from Rs. 836 crores in the corresponding quarter in 2013.

"India is a future growth market for Telenor. Upcoming spectrum auctions will be considered by us for our future need. Telenor position through Uninor is that it is serving customers who are voice and SMS users but it has seen that they are also initial data users," Baksaas said.

Telenor Chief Financial Officer Richard Olav Aa said the company has not yet decided on participating in upcoming auctions and are still in planning phase.

The annual revenue of the company increased by 36 percent to about Rs. 4,070 crores last year, from Rs. 3,001 crores in 2013. Uninor reported 2.3 million new subscribers during the reported quarter, taking its total subscriber base to 36.6 million at end of 2014. Out of this, Uninor said that 22 percent subscribers were active data users.

Average revenue earned by Uninor per user in local currency fell by 4 percent mainly due to lower voice consumption, intensified price competition to Rs. 101 in the fourth quarter compared to same quarter last year. However, decline was partly compensated by increased data usage.

"Our Internet subscriber base has gone up by 106 percent in 2014 over the previous year. Revenue from Internet services has also doubled in the same period," Uninor CEO Vivek Sood said.

Baksaas said that Telenor in India will strengthen its position in service areas where it operates but for long term need it will have to look for spectrum through which it can provide data services.

"Indian is not necessarily a national market. We are quite okay in circles where we operate. The performance that we had and ability to capture customers is proof of that. Uninor needs access to data spectrum because market is moving in that direction," Baksaas said.

The company will have to look for solutions when prices of 4G handsets in India will come down to affordable levels, he said.

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