RComm sees lower capex in FY11

By : |January 31, 2010 0

NEW DELHI, INDIA: Reliance CommunicationsIndia’s No. 2 mobile operator, expects its capital expenditure to continue to fall having invested more than 400 billion rupees ($8.6 billion) in the past four years on network expansion, a top official said.

Group Managing Director Satish Seth told analysts on a conference call on Monday the company was planning capital expenditure of 30 billion rupees for the financial year to March 2011, which would be a third lower than this year’s spending.

"We expect it to continue on a declining trend," he said, adding planned expenditure for the next financial year excluded possible investments in India’s upcoming 3G and broadband wireless access spectrum auctions.

                                 

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Seth said the current year’s 45-billion rupee expansion plan would be fully funded through cash generated from operations.

Reliance Communications has a net debt of 188.71 billion rupees after spending heavily on building a second network to expand its smaller GSM mobile services across India.

The company on Saturday reported net profit for its fiscal third quarter ended December fell by over a fifth as sharp falls in call charges squeezed margins, but investment incomes and cost control helped stem the decline.

Shares in Reliance Communications, valued at $7.6 billion, ended 2.3 percent higher on Monday. The stock was the worst performer in 2009 among the benchmark index components.

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