Uninor narrows operating loss to NOK 143 million in September quarter

KOLKATA: Mobile phone operator Uninor, the Indian arm of Norway’s Telenor ASA, reported a 15.5% fall in third quarter revenue as it could restart services in only six of the 22 circles where licences had been cancelled by the Supreme Court in February 2012. In the three months to September 30, Uninor’s revenue fell to Rs 754.5 crore ( NOK 729 million) from roughly Rs 893.2 crore (NOK 863 million) in the same quarter last year.

The reduced footprint, however, helped the Nordic mobile operator’s Indian unit to narrow its operating losses during the quarter to Rs 148 crore (NOK 143 million) from Rs 554.7 crore (NOK 536 million) a year earlier.

Revenue of its Indian operation “increased by 23% in local currency in the six circles compared to the third quarter last year”, as Uninor bet on being the “most affordable” operator within the six circles it operates in, Telenor said in a statement. The company’s subscriber base increased to 26 million at September end from 23.5 million in the comparable six circles a year earlier.

Uninor’s “gross margin in these six circles also continues to improve, and is now 3 percentage points higher than the third quarter last year”, it added.

At a time when telecom companies are reeling under Rs 2,50,000 crore of debt and trying to stay afloat amid bruising tariff wars and intense competition, Uninor’s operational performance has looked up. For instance, improvement in the quality of its customer base was reflected in a 14% higher average revenue per user (ARPU) of Rs 100 in the third quarter this year from Rs 89 a year earlier.

For the quarter, its monthly churn rate declined to 5% from 6% in the previous quarter, while it recorded a 10% reduction in acquisition cost for each new subscriber.

However, Telenor said that it continues to face challenges on the regulatory front.

Telenor said that despite fulfilling conditions for continuing operations in India, the authorities have still not approved the business transfer from Uninor to Telewings Communications Services.

Last year, Telenor ended a four-year partnership with local real-estate developer Unitech Ltd. Their joint venture, Unitech Wireless, which operated under the Uninor brand name, had lost all its licences following the Supreme Court order.

Since separating from Unitech, Telenor formed a local unit, Telewings Communications, and brought in Lakshdeep Investments & Finance as a partner to conform to local laws at that time which mandated a minimum 26% Indian ownership in a telecom company. It had since applied to the government to transfer its business from Unitech Wireless to Telewings.

Telewings has still not “been issued the unified licence required to utilise the spectrum won by Telewings in the GSM airwaves auctions” last November, Telenor added.