MTS India (Sistema Shyam TeleServices) will significantly lower its Capex (capital spending) in 2014 as compared with $35 million invested in 2013.
The Indian joint venture of Russian conglomerate Sistema, MTS India said it will start investments in roll outs only after buying CDMA spectrum during the next round of auction which will be decided by the new government after the Lok Sabha elections in April/May. The telecom operator has asked the government to auction airwaves at cost effective prices and at the earliest.
MTS India, which has reduced its presence to 9 telecom circles, has a number of unutilized BTS lying in its garage. Hence, its Capex for 2014 will be much lower than its investments in 2013.
The loss making telecoms invested $6.38 million as Capex – mainly for rolling out MTS 3G Plus – during the last quarter of 2013.
Also read: MTS indicates increase in Capex plan for 2014
Meanwhile, MTS Russia last week indicated an increase in its Capex for 2014. The telecoms said Capex spending for 2014 is expected to be 21 percent of revenue. MTS expects 3-5 percent revenue growth in 2014. In 2013, revenue for the Group grew 5 percent to over 398 billion rubles.
Recently, Reliance Communications and Idea Cellular, rivals of MTS India, have indicated that the hike in their Capex plans will not be significant as compared with previous years.
For comparison, American telecom service provider AT&T invested more than $625 million in its wireless and wired networks in the Detroit, Warren and Dearborn area between 2011 through 2013, driving a wide range of upgrades to enhance speed, reliability, coverage and performance for residents and business customers.
AT&T in 2013 made 63 network upgrades in the Detroit area, including new cell sites, addition of wireless and wired network capacity, and new broadband network connections. Additionally, AT&T expanded the reach of its network, providing access to U-verse Internet and video services to 39,000 new customer locations and delivering powerful fiber-optic connections to 4,197 business locations at 174 multi-tenant business buildings and business parks.
Sistema Shyam financial performance
MTS India said its revenues increased 5.3 percent $48 million in Q4 2013. In 2013, revenue reduced to $209 million due to reduced operating footprint.
Blended mobile ARPU for the fourth quarter increased 2.8 percent to $1.65 on account of increase in minutes of usage following improved quality of customer base. Minutes of usage increased 2.9 percent q-o-q to 373 during the quarter.
MTS India data focus
MTS India said non-voice revenues contribute 34.5 percent of total quarterly revenues. Last year, the telecoms rolled out its 3GPLUS Telecom Network (EV-DO Rev.B Phase II) across all its 9 circles of operations. Its HSD services now cover over 550 towns across 9 circles.
The company’s data card subscriber base for the quarter increased 11 percent to 1.34 million subscribers.
The company recorded its lowest full year OIBDA loss in the last four years. Consolidated OIBDA loss for the quarter and year stands at $33 million and $147 million, respectively.
Dmitry Shukov, chief executive officer of Sistema Shyam Teleservices, said: “During the quarter all our operational parameters have improved, which in turn resulted in revenue growth of 5.3 percent Q-o-Q. Given that we had launched our 3G Plus network in the latter part of Q4 2013, we expect the trend of revenue improvement to continue.”
Baburajan K
editor@telecomlead.com
