Tata Communications, which reported consolidated loss of Rs 854 crore for 2010-11, plans a slew of measures, including turning around operations of Neotel in South Africa , to improve its performance, a senior official of the company said today.
Tata Communications (formerly VSNL) would strive to drive down network costs, focus on productivity gains, address small and medium enterprise space and would provide managed services, top company officials said today.
It also intends to enhance hosting capabilities at its Neotel facility at Cape Town, in South Africa. The capacity expansion would be funded by revenues from its submarine cable business, Tata Communications' chief financial officer Sanjay Baweja said today.
"Neotel will become EBITDA positive this fiscal year. As for Tata Communications, we have begun to address small and medium enterprises. This is a segment which is in the early stages of adopting information technology.
"We will provide network connectivity, virtual private network services, security services, as well as data centre and web hosting services to these enterprises. The company intends to drive down network costs and focus on productivity gains," Tata Communications' managing director and CEO Vinod Kumar said.
The company reported a net loss of Rs 854 crore for 2010-11 which includes a loss of Rs 551 crore on account of company's 49.01 per cent stakeholding in Neotel, South Africa.
The company reported net profit of Rs 160.16 crore for the year on a standalone basis against Rs 483.18 crore in the previous year. Based on the standalone net profit, the board of the company has proposed a dividend of Rs 2 per share
Tuesday, May 31, 2011
Reliance Communications weighing tower deal proposals
Debt laden Reliance Communications, the country's second largest mobile phone company by customers, said on Tuesday it had received several indicative offers for acquiring a controlling stake in its tower arm - Reliance Infratel , while adding that its board 'has approved taking the process to the next stage of detailed due diligence with a view to completing such a potential transaction at the earliest'.
Weighed down by massive debt load and falling profits, RCOM has been exploring several fund raising options, including selling a 26% stake in its wireless business and a controlling stake in its tower arm.
An earlier deal to hive off the tower business to infrastructure company GTL Infra, which would have helped the company cut its debt by more than half, fell apart in September 2010.
The company's debt stood at Rs 32,048 crore at the year ended March 2011.
On Monday, missed street forecasts to post a bigger than expected 86% decline in quarterly profits, its seventh straight fall, despite call tariffs in the country stabilising over the last 12 months. The telco's net profit fell to Rs 169 crore for the three-months ended March 2011, when compared to Rs 1,220 crore for the corresponding period last year.
At 12:07 am, shares of Reliance Communications were trading 1.54% up at Rs 88.85 on the Bombay Stock Exchange.
After the results, its President and CEO (Wireless Business) Syed Safawi would "deleverage its balance sheet" but did not give details on the process.
"No doubt they're taking steps to refinance but the debt issue remains a problem. Unless they go in for a strategic sale - in the telecom or tower business - the problem of debt will linger," said Sangeeta Tripathi, a senior analyst at brokerage firm Sharekhan.
RCOM also cautioned investors that the proposed tower deal was 'only a preliminary disclosure, and any such potential transaction is subject to appropriate due diligence, negotiations, documentation and approvals'
Weighed down by massive debt load and falling profits, RCOM has been exploring several fund raising options, including selling a 26% stake in its wireless business and a controlling stake in its tower arm.
An earlier deal to hive off the tower business to infrastructure company GTL Infra, which would have helped the company cut its debt by more than half, fell apart in September 2010.
The company's debt stood at Rs 32,048 crore at the year ended March 2011.
On Monday, missed street forecasts to post a bigger than expected 86% decline in quarterly profits, its seventh straight fall, despite call tariffs in the country stabilising over the last 12 months. The telco's net profit fell to Rs 169 crore for the three-months ended March 2011, when compared to Rs 1,220 crore for the corresponding period last year.
At 12:07 am, shares of Reliance Communications were trading 1.54% up at Rs 88.85 on the Bombay Stock Exchange.
After the results, its President and CEO (Wireless Business) Syed Safawi would "deleverage its balance sheet" but did not give details on the process.
"No doubt they're taking steps to refinance but the debt issue remains a problem. Unless they go in for a strategic sale - in the telecom or tower business - the problem of debt will linger," said Sangeeta Tripathi, a senior analyst at brokerage firm Sharekhan.
RCOM also cautioned investors that the proposed tower deal was 'only a preliminary disclosure, and any such potential transaction is subject to appropriate due diligence, negotiations, documentation and approvals'
Monday, May 30, 2011
All telecoms gear may have to undergo TEC test before deployment
All shades of telecoms gear will have to shortly undergo mandatory certification by the Telecom Engineering Centre (TEC) before deployment in communication networks across India.
The telecoms department will soon expand the Indian Telegraph Rules to include detailed modalities for such mandatory testing and certification.
The onus will be on any original equipment maker (OEM) in the telecoms space to get its products certified before selling them in India.
"Testing shall be carried out by the Telegraph Authority or any other designated agency on payment of a prescribed fee. A suitable test certificate will be issued (to the OEM) if it complies with all parameters of testing and certification," says an internal telecoms department report reviewed by ET.
An internal department panel which is drafting the detailed norms for mandatory testing of telecoms gear is slated to submit its recommendations to the Telecom Commission by June 15. The seven-member panel largely comprises senior officials of the TEC, which is the department's technical wing.
The proposed `Telegraph Authority' is likely to be the TEC, although the telecoms department interim report is yet to spell this out.
Since such certification of telecoms gear will have a validity period, the OEM will need to renew it periodically to continue selling equipment in India.
The Telegraph Authority will also have the powers to issue show cause notices to telcos using uncertified gear and OEMs selling such equipment. Under the amended Indian Telegraph Rules, it will also have powers to confiscate telecom equipment that hasn't been tested or certified. In the event, an errant OEM fails to complete certification formalities even 180 days after being issued a show cause notice, the designated authority may confiscate such uncertified telecom equipment
The telecoms department will soon expand the Indian Telegraph Rules to include detailed modalities for such mandatory testing and certification.
The onus will be on any original equipment maker (OEM) in the telecoms space to get its products certified before selling them in India.
"Testing shall be carried out by the Telegraph Authority or any other designated agency on payment of a prescribed fee. A suitable test certificate will be issued (to the OEM) if it complies with all parameters of testing and certification," says an internal telecoms department report reviewed by ET.
An internal department panel which is drafting the detailed norms for mandatory testing of telecoms gear is slated to submit its recommendations to the Telecom Commission by June 15. The seven-member panel largely comprises senior officials of the TEC, which is the department's technical wing.
The proposed `Telegraph Authority' is likely to be the TEC, although the telecoms department interim report is yet to spell this out.
Since such certification of telecoms gear will have a validity period, the OEM will need to renew it periodically to continue selling equipment in India.
The Telegraph Authority will also have the powers to issue show cause notices to telcos using uncertified gear and OEMs selling such equipment. Under the amended Indian Telegraph Rules, it will also have powers to confiscate telecom equipment that hasn't been tested or certified. In the event, an errant OEM fails to complete certification formalities even 180 days after being issued a show cause notice, the designated authority may confiscate such uncertified telecom equipment
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