@ksh@T 20 Report post Posted November 15, 2007 The telecom sector has reported impressive year-on-year growth in recent quarters and the second quarter of FY08 was no exception. The sector reported 31.7% growth in revenue and 69.7% jump in net profit (PAT) at the aggregate level during the quarter reckoned year-on-year. However, the aggregate performance largely reflects the good growth shown by the top two cellular operators, including Bharti Airtel and Reliance Communications (RCOM), which constitute two-thirds of the total revenue of six listed telecom players. Other listed operators reported either a drop in profits or contraction in profitability. Idea Cellular, the third-largest listed telecom operator, reported robust growth in revenue and profits but this was on a lower base. Broadband services provider VSNL and state-owned telecom operator MTNL suffered from drop in profits following lower revenues while the recently-listed Spice Communications continued to report a net loss. At 43.5%, the aggregate profit before depreciation, interest, and taxes (PBDIT) grew at a faster pace compared with sales growth on account of increased operating efficiency reported by the top two companies. This also resulted in significant margin expansion. Operating margin improved by 364 basis points (bps) to 41.9% whereas margin at the net level expanded by 429 bps to 21.8%. On a sequential quarter basis, the picture differed slightly. Even though the revenue rose by 10.2%, profits at operating as well as net level could not keep up with the pace as operating costs rose at an even faster rate. PBDIT rose 9.9% while net profit went up by 5.3%. Operating margin remained flat whereas net margin shrank by 100 bps. Mobile operators continued to report robust growth in the number of subscribers during the September quarter. The total subscriber base for the five listed operators rose 61% y-o-y and 13% sequentially to 109.4 million. Bharti witnessed a 14% increase in its mobile subscriber base at the end of September over the last quarter with 11% increase in net additions. In case of RCOM, the subscriber base rose 16% while net additions increased by 15.8%. Average revenue per user dropped further during the September quarter. The fall ranged between 4% and 6% reckoned Q-o-Q. Minutes of usage per user per month saw a fall during the quarter after a moderate rise in the earlier quarters Share this post Link to post Share on other sites
