Sistema Shyam loss widens 63% in Q1

Dylan Bushell-Embling
08 Jun 2011

India's Sistema Shyam Teleservices has recorded a 63% wider net loss in the first quarter, on expenses rolling out its CDMA network.

The joint venture majority owned by Russia's Sistema, which trades in India under the MTS brand, posted a loss of 6.66 billion rupees ($149.2 million) for the three months ending in March.

Sistema Shyam, which launched services in 2009, said it had made capex investments totalling nearly 3 billion rupees in the quarter. This brings the total sum the operator has spent rolling out its network to 58 billion rupees.

But the expansion strategy appears to be paying off, with revenue for the quarter growing 201% year-on-year to 2.36 billion rupees. Operating income margins also improved to a negative 193% from a negative 449%.

Sistema Shyam's mobile customer base increased by 19% quarter-on-quarter to just over 10 million.

CEO Vsevolod Rozanov said the period represented “the first time our revenue growth during the quarter was faster than our growth in wireless subscribers,” as revenue grew by a sequential 22%.

But the company's customer base represents just a small portion of the roughly 812 million mobile subscribers in India. The company estimated that its market share increased to 1.24% in Q1, from 1.12% a year earlier.

Sistema Shyam also announced plans to roll out CDMA EV-DO Rev. B Phase 2 in the state of Rajasthan by the third quarter. The company last month handed ZTE what it said was the world's first contract for the technology.

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