To get over Rs 900cr via tower stake sale: TTML

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To get over Rs 900cr via tower stake sale: TTML

Mukund Govind Rajan, Managing Director of TTML, the company will see an inflow in excess of Rs 900 crore. “We will use proceeds for debt repayment and network rollout.”

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS To hold 12% stake in Quippo post merger: SREI TTML sells tower arm to Quippo-WTTIL for over Rs 1,300cr ALSO READ See latest News about TataTeleservice See previous management interviews See what other Experts & Brokerages are saying about TataTeleservice TataTeleservice BSE | NSE 31/05/12 Are Mutual Funds betting on TataTeleservice?

Q: Quarter on quarter you have actually improved your EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) margins despite a lot of pressures on performance in terms of average revenue per user (ARPU) and revenues per minute? The EBITDA at 22, does it get better in the fourth quarter?

A: I do not want to give a speculative comment, but the fourth quarter will be announced in April. I think this year has been tremendous for the company. We have been in fact through our GSM launch dramatically improved our market share. We are now on an accumulative basis the number 2 operator in Maharashtra and number 3 operator in Mumbai. But the good news has been that our minutes of use growth, last quarter, we announced that over the previous year we had a 39% MOU growth that has also reflected in our revenue growth and our EBITDA growth. Our company was one of the few companies in India that actually announced an EBITDA growth quarter on quarter.

So I think it has been a good performance in the wireless side. On the wire line side as well, we have seen a tremendous performance this year. We had the highest ever market share that this company has recorded year to date, just under 60%. I think both these are now generating momentum for this company. We couldn't have asked for a better time for the sale of our tower assets because the valuation that we have received has been handsome valuation, better than recent precedent transactions that we have seen in the market and positions us extremely well to participate in the 3G auctions and next year.

Q: Do you think that the competition is now at an end? Can you say that you will be able to consolidate your ARPUs this current Rs 143 or your revenues per minute will consolidate at levels that you have reported at Q3 or will Q4 be just be low and things could get better from here?

A: I would hope so. The noises that you hear from the market, from the competitors suggest that there is a fair degree of sense in the industry that we are reaching a point where things have bottomed out. I think in each circle there are still one or two new operators with some scale who are yet to enter and as a market entry strategy there would be efforts to offer disruptive tariffs. But on the whole probably RPMs will fall a little bit more, but we are reaching a point where from hereon hopefully things will start looking up.

In our own case, just to clarify, our RPM (rate per minute) has actually moved only 2 paise per minute in the last three quarters and it went up after we launched a GSM services with Tata Docomo. So we are not actually worried about where RPMs have gone. We think these are quite sustainable and even if they were to fall few more paise per minute, we would certainly continue to deliver operating and cash profits as we have been doing.