RCOM’s 4QFY10 revenues and EBITDA (down 4%/ 12% qoq) came in 6%/13% below our estimates. Reported PAT of Rs12.2bn was up 10% qoq, but we estimate adj. /normalized PAT of Rs4.9bn (down 25% qoq).
RCom Management on Impact of TRAI Recommendations – Mgmt confirmed that savings on account of reduction in access license fee, would more than offset additional license fee expense on ISP revenues (at 6% of AGR). Mgmt said that the TRAI has not yet addressed applicability of license fee on VAS revenues (which RCOM also reports under ISP license); the TRAI would conduct separate consultation on this issue, which may eventually bring mobile VAS companies under the ambit of license fee.
Capex update. Mgmt provided FY11 capex guidance of ~Rs30bn (excluding 3G/BWA) versus Rs42bn incurred in FY10. Capex in
4QFY10 was lower at Rs8.8bn (versus our Rs13bn estimate), partly due to slowdown in coverage-related capex requirement and delays in the clearance of Chinese equipment by the DoT.
