Sistema Shyam TeleServices Ltd. (SSTL), which operates its telecom services under the MTS brand in Indias on Wednesday reported a net loss of Rs. 760 crore for the third quarter ended September 30, 2013 compared to net loss of Rs. 495.5 crore for the same period a year ago.

“The Net Income declined mainly on account of forex losses and business restructuring,” SSTL’s Chief Executive Officer Dmitry Shukov said.

Revenue in Q3 2013 decreased by 30% year-on-year to Rs 2,844 million which was largely driven by closure of circles.

Revenues in 9 operational circles remained flat Q-o-Q, due to seasonality. Consolidated revenues decreased by 2.2% Q-o-Q to Rs 2,844 million (USD 45 million) due to reduced operating footprint.

SSTL has operations in Delhi, Kolkata, Rajasthan, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh (West), Kerala and West Bengal.
 
Blended mobile ARPU for the quarter increased by 6.8% to RS 95 on account of increase in minutes of usage following improved quality of customer base.

Minutes of usage increased by 11% to 363 during the quarter (Q-o-Q). Success of SSTL’s data strategy is evident with non-voice revenues contributing 34.5% of total quarterly revenues, the highest in the industry.

SSTL’s HSD services now cover over 500 towns across 9 circles. The Company’s data card subscriber base for the quarter increased by 4.5% to 1.21 million subscribers.

Consolidated OIBDA loss for the quarter remained flat at INR 2,197 million (USD 35 illion).

SSTL was the first telecom operator in India to get Unified Telecom License. The license will enable the Company to provide technology neutral telecom services for a period of 20 years.

SSTL rolled out its 3GPLUS Telecom Network (EV-DO Rev.B Phase II) across all its circles of operations launches MBlaze Ultra dongle with speeds of upto 9.8Mbps.

Company also plans to launch a slew of Smartphones, enabling customers to further utilize the power of 3GPLUS network.

According to Dmitry Shukov, Chief Executive Officer of Sistema Shyam Teleservices Ltd “During the quarter we continued to focus on optimizing our business in line with our medium term target to turn OIBDA positive by end of 2014. On the regulatory front, though 100% FDI in telecom is a welcome move, we expect the government to provide a clear roadmap for the auction of 800 Mhz spectrum. This is a must for proliferation of data services amongst the masses and also for restoring investor confidence.”

In the reporting period, SSTL’s mobile subscriber base declined by 1.8% quarter-on-quarter and reached 9.6 million customers as of September 30th, 2013. SSTL’s mobile subscribers’ MoU for Q3 2013 improved to 363 min vs. 328 min in Q2 2013.  Non-voice revenues, from both data and mobile VAS, for the quarter declined by 2.2% to INR 979 million.

SSTL reported an OIBDA loss of Rs 2,197 million for Q3 2013, reflecting an improvement in OIBDA margin by 11 p.p. Y-o-Y, margins improved on account of cost optimization, strict control over marketing and other expenditures and also on account of Operational efficiencies.

Sergey Savchenko, Chief Financial Officer of Sistema Shyam Teleservices Ltd., commented, “In Q3 2013, our revenues during the quarter declined slightly due to seasonality, however operating parameters like ARPU, MoU continued to improve. Going forward, with the launch of our 3GPlus network, we expect the Company to come back to its high growth path.”