Reliance Comms to trim debt with data services strategy

India telco to finetune plans to boost data services revenue to pare massive debt of more than US$6.4 billion over the next five years.

India's second largest mobile phone company by subscribers, Reliance Communications, plans to tweak its data services strategy to help pare its massive debt over the next five years.

According to a report by Times of India on Tuesday, the company's CEO, Gurdeep Singh, said that the telco would focus on making the data revenue business more robust. It noted that Reliance had a debt of more than 356 billion rupees (US$6.4 billion).

The telco plans to raise its revenue from the data business by more than six times to 90 billion rupees ($1.6 billion) over the next five years, said Singh in the article. He added that this would involve an investment of 15 billion rupees (US$269.4 million) in network optimisation and data services in the current fiscal year.

Reliance will also focus on monetizing mobile data, including acquiring more postpaid customers and will deploy MiMo technology in select circles, including Mumbai and Delhi, which can offer ultra high data speeds of up to 42Mbps on the go, noted the news daily.

The company will also forge tie-ups with CDMA smartphone makers to provide upgrades to its existing CDMA subscribers.

In its first quarter results released Monday, Reliance posted a 3.2 percent rise in its first quarter net profit at 1.62 billion rupees (US$29.3 million). This was the back of a 7.7 percent jump in revenue to 53.19 billion rupees (US$954.5 million) for the three months ended June.

The company has to struggle with the pressure of servicing its massive debt, mainly financing costs from loans used to buy expensive bandwidth for third-generation mobile telephone service, noted Total Telecom in a report Monday. Despite the heavy investments by Indian telcos in 3G networks, services have struggled to take off in India.