Reliance Infocomm May Still Be In The Red

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http://economictimes.indiatimes.com/articleshow/794282.cms

PUJA MEHRA & PRAGATI VERMA

NEW DELHI: Reliance Industries (RIL) has privately disclosed that Reliance Infocomm continues to be in the red, with a loss of about Rs 100 crore for the quarter ended 30 June ’04.

In comparison, Reliance Infocomm had booked losses of Rs 390 crore in the last financial year. At a post-results analyst meet, RIL told researchers that Reliance Infocomm will not be receiving any more funding from it.

When contacted, the official spokesperson for Reliance Infocomm refused to either confirm or deny the losses. RIL, which holds about 45% in Reliance Infocomm, had announced that last year that it would not be investing any additional sums in Reliance Infocomm.

Reliance’s high-profile communications arm has been expanding fast and is estimated to have cornered a fifth of the mobile market with a subscriber base of about 80 lakh. The company, however, is believed to be facing bad debts on account of non-payments.

The company is trying to convert problematic post-paid users into pre-paid subscribers to address the problem and is believed to have already converted 35% of the target segment.

It also has ambitious plans involving huge investments, including extending its coverage to 5,000 cities and towns.

An enterprise broadband soft launch is scheduled for the first quarter of the next fiscal, with a consumer broadband launch next on the anvil.

The company has already invested about Rs 15,000 crore in the info-comm business, mainly into wireless telecom operations and is now planning to add another 60,000 kms of optical fibre network to the existing 1 lakh kms covering the entire country.

There company also has plans to add Rs 5,000 crore to its investment, thus taking the total to about Rs 20,000 crore.

Analysts said it was disclosed at the meeting that the overall loss figure for the quarter was slightly higher at Rs 113 crore but added that it did not provide for inter-company transactions that need to be set off, as Reliance Infocomm is a subsidiary of RIL.

RIL has not taken credit for CST for the quarter, for the first time. Until now, the company had been making provision for the savings on account of a CST waiver/deferral from the Gujarat state government.

The issue is still disputed and the status of the Rs 770 crore they have to absorb in their books it is not clear, since the concession has been discontinued by the government.

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Look Where All Those Khachas Have Led To..., Reliance Infocomm may still be in the red

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http://economictimes.indiatimes.com/articleshow/794282.cms

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Reliance Industries (RIL) has privately disclosed that Reliance Infocomm continues to be in the red, with a loss of about Rs 100 crore for the quarter ended 30 June ’04

Edited July 30, 2004 by Chirag