RCom Losses Grow Significantly to Rs 18,827 Crore in Q4

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Reliance Communications has reported that its losses grew to a whopping figure of Rs 19,827 crore compared to the Rs 1,112 crore which was the losses in the January-March quarter of the year 2017. According to the information available, the losses grew significantly because of the one-time fee which Reliance Communications was charged for the close of its wireless assets. The telco after facing grim situations in the market, post the tariff war which Reliance Jio kicked off, went into a steep downslope and reported heavy losses. As a result, RCom shut its operations by the end of last year. The one-time fee provision for impairment of assets by the telco for the fourth quarter of FY18 was Rs 21,255 crore.


Not only did the hefty one-time fee payment contributed to the loss of telco, but also the meagre revenue which fell down further was a major factor for the widened losses. This year the telco registered revenue of Rs 976 crore, which is a decline of 39.9% when compared to last year. To pare its debt, the telco is likely to sell its wireless assets to Reliance Jio and its real estate in New Delhi and Chennai to Brookfield for a total amount of Rs 18,100 crore.

The telco has also emerged free from a legal dispute as it recently dodged insolvency by making Rs 550 crore settlement with the Swedish manufacturer, Ericsson. The telco also had to pay Rs 232 crore to the minority shareholders of its tower unit-Reliance Infratel in order to stay clear of any further complications.

An official statement from the telco pointed out that it was selling its wireless assets and real estate in order to resolve its debt. The company also remarked that they hadn’t paid interest on the debt in this quarter, else the losses would have been higher. The statement said, "The loss would have been higher by Rs 989 crore and Rs 3,609 crore for the quarter and year ended March 31, 2018, respectively.”

However, not in all segments did RCom make a huge loss, in its global operations the company made a profit of Rs 7 crore, a dip from the previous quarter's Rs 20 crore. It had made a loss of Rs 10 crore in the last fiscal year for the same quarter.

The total annual loss for the FY which ended in March was pegged at Rs 23,950 crore compared to the Rs 1,320 crore which was the reported annual loss, a year ago. The revenue, on the other hand, was pegged at Rs 4,684 crore compared to Rs 6,637 crore, in the previous financial year.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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