RCOM to exit PCO and fixed wireless phone business

"Revenues are down this quarter as a result of our rebalancing of our product portfolio. We are doing away with low margin business even if it provides high volume as it puts pressure on our resources, including scarce resources like spectrum. We are deliberately moving away from the wholesale segment of PCO and FWP business," said RCOM over analyst call today.

The company said that these two are low margin businesses where wholesale minutes are provided to the distributors at a bulk discount.

"We are putting our resources on more profitable Data and VAS businesses thereby future proofing the business against voice led growth alone," RCOM said.
The company said that it has rolled out CDMA network in 500 towns and 3G services in 150 towns.

"We have remained focused on building quality of operations by increasing paid minutes of usage. The RPM (revenue per minute) for RCOM remained unchanged at a healthy 44 paise per min vis-à-vis the industry, which continued to show marginal decline in the RPM," RCOM said

Three quarters back, RCOM's RPM was lower than other industry players by 8-10 paise per min.

The company has plans to complete roll out 3G services in all the circle where it has licences by the end of this financial.

"We will start complete 3G roll out in all circles by March," Syed Safawi, President and chief executive officer, wireless business, RCOM said during the call.

RCOM had won licences for 3G services in 13 circles and had paid Rs 8,585.04 crore for the spectrum.RCOM posted a decline of 54.84 per cent in net profit at Rs 525.99 crore for the third quarter.The share of company closed at Rs 97.40 marginally above its previous close of Rs 97.15 at BSE.