The Indian telecom arm of Russian Conglomerate Sistema, SSTL, on Monday reported a reduction in loss at Rs. 844.7 crore during the three-month period (Q2) ended June 30, 2013, due to cutting down of operations in loss-making circles.

The company had posted a loss of Rs. 1,180 crore during the same period a year ago.

“There was one time loss reduction of around Rs. 469 crore due to closure of operations where return was not very high. The finality of operations came after March auctions and we could re-launch our business in Q2,” Sistema Shyam Teleservices’ Chief Executive Officer Dmitry Shukov said in New Delhi.

“The quarter-on-quarter net income declined mainly on account of forex losses and exit costs,” SSTL’s Chief Financial officer Sergey Savchenko said.

As result of reduction in the company’s footprint, its customer base reduced by 19 per cent on a quarterly basis to 98 lakh, and its non-voice revenues — from both data and mobile VAS — during the period declined by 20 per cent to Rs 100.1 crore.

The company loss due to depreciation in the value of rupee stood at Rs. 329 crore during the reported quarter.

“The impact of exit cost was less compared to forex losses” Mr. Savchenko said.

SSTL had to close down business in 13 out of 22 circles as a consequence of the Supreme Court order which cancelled 122 2G telecom licences, including 21 of SSTL, in February 2012.

SSTL won spectrum in 8 circles in March through auction to continue its operations but the government is yet to allocate the airwaves frequencies that it acquired.

“We are waiting for a third carrier (spectrum slot) for the launch of Revision B network. The peak speed at this network is around 10 megabit per second. Even inside a room or a building, a user will get at least speed of 3 mbps,” SSTL’s Head for Strategy Ranjan Banerjee said.

Savechenko said the cost of dongle for the revision B network will be less compared to current price.

“We are also talking with both Chinese and Indian handset vendor for smartphones that will support the Revision B network,” Mr. Shukov said.

SSTL halved its OIBDA (operating income before depreciation and amortisation) loss to Rs. 219.3 crore from Rs. 450.9 crore.

The total revenue of the company declined on yearly-basis to Rs. 290.9 crore in the reported quarter from Rs. 417.7 crore in corresponding period a year ago, mainly due to reduction in company’s footprint in the country.

The company, however, reported an increase in revenue in 9 circles where it currently operates, by 2.4 per cent.

During the quarter, SSTL invested Rs. 15.4 crore and its total debt stood at Rs. 4,187 crore.

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