The telecom market is growing by 8 million subscribers a month. In this volume-based business, the high subscriber additions are driving the profitability and turnover of major operators like Bharti Airtel, Idea Cellular, Reliance Communications Limited (RCL) and Bharat Sanchar Nigam Limited (BSNL).

However, operators are not the only beneficiaries of the tremendous growth.Equipment makers, manufacturers of optical fibre, broadband service providers, etc.have also witnessed a spurt in their businesses, as seen in the recently announced financial results for the quarter ended September 2007. tele.net has compiled a financial scoreboard of some of the key telecom companies.

Reliance Communications

Riding on the growth of its wireless and broadband services, RCL posted a net profit of Rs 13.05 billion for the second quarter of 2007-08, a year-on-year increase of 86 per cent. Its revenue stood at Rs 45.79 billion.

RCL's operating margin rose by 460 basis points (bps) to 42.8 per cent. This was on account of a 400 bps increase in the profitability of its wireless business segment and a 300 bps increase in the margin of its global business segment.

The company's EBITDA grew by 46 per cent to Rs 19.62 billion and the EBITDA margin rose to 42.9 per cent. This was due to the profitability of all businesses including wireless, global and broadband.

RCL's revenue from its wireless business rose by 45 per cent, from Rs 25.74 billion in the second quarter of 2006-07 to Rs 37.23 billion. The company added 4.4 million wireless customers over the quarter, taking its total customer base to over 36 million. Its wireless revenue per minute remained steady at Re 0.74. On the broadband front, the number of access lines almost doubled to 792,000 from 425,000.

As the company expands into the rural pockets of the country, it is facing a decline in its average revenue per user (ARPU) and minutes of usage (MoU). RCL's ARPU stood at Rs 361 compared to Rs 375 in the quarter ended June 2007.The MoU per user per month fell from 510 to 490 over the same period.

RCL is planning to roll out GSM services in over 100 cities and towns within six months of receiving spectrum. This will be part of the first phase of its panIndian GSM launch. It is planning to invest around $2 billion in the next two years to put together its GSM network.

Bharti Airtel

Bharti Airtel reported a net income of Rs 16.14 billion for the July-September 2007 quarter, an 82 per cent increase over the net income for the corresponding quarter in the previous year which stood at Rs 8.88 billion.

The company exceeded its own targets by adding 6.2 million mobile users during the quarter, the highest customer addition ever during a three-month period by a wireless company in India. Its market share in the wireless space increased to 23.4 per cent from 21.4 per cent in September 2006.The company's revenue increased by 45 per cent to Rs 63.37 billion from Rs 43.57 billion in the corresponding quarter in the previous year. EBITDA grew by 59 per cent to Rs 27.09 billion.The operating margin rose to 42.8 per cent from 41.4 per cent in the preceding quarter (April-June 2007). This helped offset the drop in ARPU from Rs 390 in April-June 2007 to Rs 366. Compared to the corresponding quarter in the previous year, the ARPU dropped by 16 per cent.

The company, which has planned a capex of $3.5 billion for 2007-08, is well on track to meet the expansion and rollout plans. According to company sources, $1.9 billion has been spent so far.

Bharti is also looking at the possibility of getting financial and strategic partners for its infrastructure company, Bharti Infratel, which is likely to be demerged soon. Bharti is also examining the possibility of sharing infrastructure with BSNL.

Idea Cellular

Idea Cellular's net profit declined by 28.58 per cent on a sequential basis from Rs 3.08 billion in the previous quarter (April-June 2007) to Rs 2.2 billion in the quarter ended September 2007. However, on a year-onyear basis, the net profit grew by 100 per cent. The net profit for the JulySeptember 2006 quarter was Rs 1.1 billion.

Idea's total revenue increased to Rs 15.64 billion from Rs 10.13 billion in the corresponding quarter of the previous year. On a sequential basis, the company's EBITDA was almost unchanged even asconsolidated revenues grew by 6 per cent.This was mainly on account of declining ARPU impacting the company's bottomline. The ARPU came down to Rs 288 from Rs 320 in the previous quarter.

Idea added 2.55 million subscribers during the quarter, taking its subscriber base to 18.67 million.

Spice Communications

Spice Communications posted a net loss after tax of Rs 55.3 million for the quarter ended September 2007 as compared to the net loss of Rs 248 million for the same quarter last year. Total income increased by 42.18 per cent to Rs 2.65 billion from Rs 1.86 billion.

Scale efficiencies pulled up EBITDA from Rs 422 million in the July-September 2006 quarter to Rs 760 million, an increase of 80 per cent. The EBITDA margin improved to 28.7 per cent from 22.6 per cent.

Mahanagar Telephone Nigam Limited

Mahanagar Telephone Nigam Limited (MTNL) posted a 13.7 per cent decline in net profit from Rs 1.09 billion in the quarter ended September 2006 to Rs 947.8 million in the corresponding quarter in the current year. Total income decreased by 1.4 per cent to Rs 13.45 billion from Rs 13.65 billion.

The dip in net profit and total income was largely due to the 4.8 per cent decrease in income from basic services and increase in administrative expenses.Income from basic services was Rs 9.79 billion compared to Rs 10.29 billion in the corresponding quarter of the previous year. MTNL's income from mobile services grew 15.74 per cent to Rs 2.18 billion from Rs 1.89 billion.

MTNL, which serves the highly saturated markets of Mumbai and Delhi, is now looking to expand its operations ouTside the country. It plans to infuse Rs 5 billion into its international operations in the current fiscal year for purposes such as acquisitions and bids for new licences in developing countries.

Videsh Sanchar Nigam Limited

The decline in revenue from the enterprise and carrier data segment has led to a 42.5 per cent decline in Videsh Sanchar Nigam Limited's (VSNL) net profit from Rs 1.07 billion for the quarter ended September 2006 to Rs 614.2 million for the quarter ended September 2007. Total income dropped from Rs 10.03 billion to Rs 9.87 billion.

While revenue from the enterprise and carrier data segment witnessed a year-onyear decline of 12.8 per cent, from Rs 3.55 billion to Rs 3.09 billion, revenue from the wholesale voice segment remained constant at Rs 5.03 billion.

The company expects to double its revenues, more than 50 per cent of which comes from outside India, in the next five years. It plans to generate 20 per cent of its revenue from emerging markets such as South Asia, Africa and West Asia in the next five years on the back of increasing bandwidth demand from outsourcing firms. To meet the demand, VSNL is investing Rs 7.86 billion to lay a new fourfibre pair cable system linking Singapore, Hong Kong and Japan, with an additional connection to the emerging markets of the Philippines and Vietnam.

Sterlite Technologies

Sterlite Technologies (formerly Sterlite Optical Technologies), an integrated optical fibre manufacturer and global provider of telecom cables and power transmission conductors, posted net profits of Rs 272.6 million and earned net revenues of Rs 4 billion in the quarter ended September 2007. Export sales constituted about 30 per cent of the total revenue.

During the period July-September 2007, the company commenced operations at its new Power Transmission Conductors project at Haridwar and completed network implementation of MTNL's multi-protocol label switching service in New Delhi. The company was also awarded a product patent in China for its OH-LITE optical fibre.

Tulip IT Services

Tulip IT Services, an end-to-end IP data connectivity and network integration provider, posted a net profit of Rs 370.9 million. This marked a rise of 83.16 per cent compared to the net profit for the quarter ended September 2006 which stood at Rs 202.5 million. Total revenue increased by 43.02 per cent to Rs 2.65 billion from Rs 1.85 billion.

The company's strong growth in the IP VPN segment as well as the change in revenue mix led to EBITDA rising from Rs 288.4 million to Rs 579.6 million.Tulip's net profit margin rose to 14 per cent from 10.93 per cent.