RCom Plans to Raise Annual Capex To Rs 4,000 Crore
New Delhi: Telecom operator Reliance Communications has enhanced its annual investment to Rs 4,000 crore with focus on 3G services, while it ended 2G service in five circles including Bihar, West Bengal and Assam.
"I am happy to share we are increasing financial guidance for capex this year from Rs 3,000 crore to Rs 4,000 crore. Much part of it this capex will be invested in financing our 3G footprint and strengthening our footprint in MP-CG (Madhya Pradesh, Chhattisgarh) where we acquired 900 Mhz spectrum,"
Reliance Communications chief executive for Consumer Business Gurdeep Singh told analysts on Monday.
He said part of the investment will go in upgrading core network for 4G service, which the company may launch in couple of months from now.
Similar level of investment is expected to be made in coming years as the company will continue to focus on 3G and 4G services.
He said the company is seeing uptake of 3G service and device penetration in its market has reached to level where the company needs to invest for profitable growth.
RCom has also closed servicing 2G customers in five circles - West Bengal, Bihar, Assam, Odisha and Northeast areas as it failed to win back 900 Mhz. RCom lost 8.5 million 2G customers as result of ending the service in these areas.
The impact was visible on company's result in third quarter ended December 31. RCom had reported a 15 per cent decline in consolidated net profit to Rs 171 crore for the period compared with net profit of Rs 201 crore a year ago.
Total income also declined by 2.9 per cent to Rs 5,277 crore compared with Rs 5,435 crore last fiscal.
Singh said the roaming agreement with Vodafone is for 3G services and it provides network back to customer where they find 3G coverage gap.
"This (pact with Vodafone) is not a 2G ICR. It is 2G ICR for fall back to our 3G customers should they hit a black patch in the coverage within a circle much like anybody else. This is not a ICR that lets us acquire 2G subscribers from the network. We are a pure play 3G operator in these five circles," Singh said.
