Sistema Shyam reduces net loss despite India uncertainties

Indian operator Sistema Shyam has managed to reduce its net loss to INR7.79 billion ($143 million) for the fourth quarter of 2012, from INR11.98 billion during the same period in 2011, despite the considerable uncertainty over the company’s future towards the end of last year.

The operator said the net loss would have narrowed further were it not for unfavorable movements in exchange rates.

Indian operator Sistema Shyam has managed to reduce its net loss to INR7.79 billion ($143 million) for the fourth quarter of 2012, from INR11.98 billion during the same period in 2011, despite the considerable uncertainty over the company’s future towards the end of last year.

The operator said the net loss would have narrowed further were it not for unfavorable movements in exchange rates.

Owned by Russian investment company Sistema (Moscow, Russia), the operator was one of several that had their licenses cancelled by Indian authorities in February 2012, forcing it to bid for fresh spectrum in recent government auctions or quit the country entirely.

“During the quarter, our focus was on retaining subscribers, controlling expenses and preparing for auctions,” said Vsevolod Rozanov, the president and chief executive of Sistema Shyam (New Delhi, India). “We now look forward to turning the page on last year’s uncertainties and building an even stronger business in India through continued focus on our data-centric voice-enabled strategy.”

Sistema Shyam paid INR36.39 billion to secure in eight of its core circles during recent auctions and says it can potentially service 40% of the country’s population, address 60% of data business potential and safeguard 75% of its current revenues.

Indian authorities have allowed the company to reduce its spectrum by the INR16.26 billion it previously incurred in license costs.

For the fourth quarter of 2012, revenues came in at INR3.9 billion – 3% less than in the fourth quarter of 2011 – but the operator reported growth of 31% for the full year, to INR16.19 billion.

The magnitude of the company’s loss leaves it with a profit margin for 2012 of -184%, although the figure was -286% in 2011.

The operator claimed to serve 14.89 million customers in the fourth quarter of 2012, 10.5% less than in the preceding quarter.

Executives blamed the continued uncertainties over telecoms licenses for the defections.