Satyam Infoway Q4 net loss widens, revenue jumps

By : |June 5, 2001 0



MUMBAI: Satyam Infoway, a leading Indian Internet services firm, on Monday
reported its net loss for January-March nearly quadrupled year-on-year but
narrowed it from the previous quarter.

The diversified Internet company – which is India’s second-largest commercial
Internet service provider after state-run telecommunications firm Videsh Sanchar
Nigam Ltd – lost $18.2 million in the fourth quarter in contrast to $3.8 million
in the year ago period.

The company posted a loss of $18.4 million in the October-December quarter.
Total revenue in the fourth quarter, from the Internet access, corporate
services and portal businesses, doubled to $11.9 million from $5.9 million in
the year-ago period.

Operating loss at the firm narrowed to $7.3 million in January-March from
$8.5 million in the previous quarter. "This was a landmark quarter for us
in which we reduced our cash loss for the first time, which is a clear reversal
of a trend," R. Ramaraj, managing director, told a news conference in
Chennai.

"This was achieved by expanding sales revenue and reducing operating
costs simultaneously," he added. Satyam Infoway, which had $28 million in
cash at the end of 2000/01, expects to break even in the current year as
projected earlier, he said.

The net loss for the full year of 2000/01 was $53.5 million compared with
$8.1 million in the previous year. Nasdaq-listed Satyam Infoway is
majority-owned by Satyam Computer Services, a leading Indian software services
firm. Satyam Infoway’s American Depositary Shares were down 4.1 per cent at
$3.74 on Nasdaq in Monday morning deals. Satyam had 410,000 retail Internet
accesses customers and another 50,000 community accesses customers, through
cyber-cafes at the end of the year.

Average revenue per user seen improving
Ramraj said the fall in average revenue per user (ARPU) seen in the first
three-quarters had been arrested in the fourth quarter. The ARPU was $1.42 per
user per month in the fourth quarter, but did not reveal the figures for the
previous quarters.

"We have raised prices on the unlimited access, which constitutes the
majority of the serious users, and on the other hand, we also expect bandwidth
costs to come down even further. So we should be abe to see ARPUs
improving," Ramaraj said. Satyam Infoway earned 68 per cent of its revenues
from corporate services, 24 per cent from retail Internet services and eight
percent from its portal business in the fourth quarter.

It expects corporate service revenues, which include e-business consultancy
and data management services, to rise to 70 percent of total revenue in the
future.

(C) Reuters Limited 2001.

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