Reliance Communications says CDMA business to improve within 18 months

Reliance Communications said on Monday that it expects its CDMA technology-based mobile business to "stop bleeding" and start contributing to company's growth within 12 to 18 months.. "We see in 12 to 18 months...bleeding stop completely and this segment also contributing to growth," Gurdeep Singh, Reliance Communications' CEO for wireless business, said to a query on the company's CDMA business during an analysts call on earnings.. He said the company is attempting to reduce voice-only customers on its network and is looking to attract those who spend more on data and value-added services.. "I would say in this bucket fill, inflow of pure play voice customers is being reduced dramatically and infill is happening with more of the smartphones, high-end feature phones. Attempt is to get better quality customers," he said.. The company said its non-voice services contributed around 21 per cent to its total revenues. It had 29.4 million mobile internet users during the January-March quarter, out of a total of around 120 million subscribers.. The firm has evolved a strategy to use CDMA spectrum mainly for providing wireless Internet services to increase revenues and migrate its predominantly voice customers to GSM technology platform.. "We are attempting at reducing part of business (CDMA) that has been a consistent bleed because of the stressed eco-system and we have been successful in migrating the bulk or weight of the business towards GSM and data (internet). As this ratio keeps increasing...the pull down factor keeps reducing," Mr Singh said.. Reliance has stopped providing entry level CDMA phones, costing around Rs 1,100, to its subscribers and has started selling phones starting at about Rs 2,200.. The company recently raised call rates by up to 30 per cent. Mr Singh said the telecom industry is no longer in position to absorb cost.. "Our internal objective is that in the next two quarters we want to stop the bleed. In a sense, in next or two quarters we should start seeing stagnancy in this before it begins to contribute as we begin to populate more CDMA smartphones on this network," he said.. The company saw revenue from its GSM and wireless internet contributing 64 per cent to its total wireless revenue, up from 57 per cent a year ago.. Total income of the company has increased by 2.39 per cent to Rs 5,130 crore during the January-March quarter as compared to Rs 5,010 crore in the same period last year.. However, the firm posted 8.73 per cent dip in net profit at Rs 303 crore for the fourth quarter ended March, 2013 from Rs 332 crore in the same quarter last financial year.. Net profit declined 27.58 per cent to Rs 672 crore in FY13 as compared to Rs 928 crore the previous year. The total income rose 4.49 per cent to Rs 20,561 crore from Rs 19,677 crore in 2011-12.. Net debt of the company increased to Rs 38,864 crore during the reported quarter from Rs 37,360 crore as on December 31, 2012. Overall, Mr Singh said, "There is a small section of CDMA customers who have been abusing the network and giving us very low RPMs (of around 5 paisa per minute). We are in the process of churning them out and re-populating the freed up bandwidth with high-end large-screen customers on dongles and heavy-data-usage customers of Smartphones.". "Along with measures like tariff corrections, this will see our CDMA RPMs increasing significantly over the next few quarters," he added.

Reliance Communications says CDMA business to improve within 18 months

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