With no further room for lowering of telecom tariffs and a fast saturating voice-based mobile market, it is the CDMA telecom operators that are poised to finally takeover GSM telecom operators in the long run in India.
Sistema Shyam Teleservices ltd (SSTl) says that voice services market was getting saturated and a further growth was unlikely due to rising operating costs. With this, data services operators were poised to capture more market in India as in Europe and Americas. This was particularly as voice over data like VoIP and lTE based voice technology is offering almost free calls and telephony world over.
“This would come about as voice services market are saturating all over the world and it was the data services that was becoming increasingly popular (growing by almost 3 times over voice) and voice is being carried over data through various applications (like Skype, VoiP, Viber et al )” said Sergey Savchenko, Chief Financial Officer (COO), SSTl told The Pioneer. SSTl is popularly known by the brand name MTS.
Commenting on the recently concluded 2G telecom auction, Dmitry Shukov CEO, MTS said:”it is time now for India to move on to 4G/5G as prevalent globally instead of pushing outdated 2G technology.”
He said that there was increasing penetration of the data services and that MTS was focusing on this area in the coming months. He said that this could be seen already in the success of the MTS strategy in India as the non-voice revenues had contributed almost 35 per cent of the fourth quarter revenues of the company for 2012-13.
Reinforcing the current trend in the industry to shift towards voice and data bundling, as was recently being done by major operators like Vodafone and Idea, Shukov said that the company would be concentrating on its strategy to enhance its presence in the non-voice and data market. He said that will reinforce presence on data services in India which was poised to see a major growth in the country.
The company reported a QoQ consolidated revenue increase by 5.3 per cent to Rs2996 million. SSTl also reported narrowing of loss at Rs445 crore in the fourth quarter ending December 31,2013. The company posted loss of Rs778.7 crore in the same period a year ago.
“SSTl’s net loss during the quarter reduced by 42.8 per cent year on year basis. The Net loss reduced mainly on account of forex gains and lower interest expenses,” said Shukov.
The revenue of the company during the quarter reflected closing down of its operations in 13 out of 22 service areas. While the revenue of company reduced by about 23 per cent to Rs299.6 crore during the quarter from Rs390.2 crore it posted in the same period a year ago. SSTl at present operates in nine service areas - Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West), West Bengal and Rajasthan.
The go forward plan includes continuing with investments in operations to drive maximum value from our 3G Plus network,” said Savchenko. SSTl made investments of Rs37.4 crore during Q4 2013. During the reported quarter, the company launched its high speed data service, 3G Plus, in 550 towns across all 9 circles where it operates. Debt from banks and financial institutions at the end of December 31, 2013 on the company stood at Rs3,693 crore. SSTl’s annual loss for 2013 also narrowed to Rs2,694.2 crore from Rs2,982.1 crore it posted at the end of 2012.