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Infocomm sniffs profit

Mumbai, Oct. 16: A few months after its launch, Reliance Infocomm is set to report profits this year, said vice-chairman and managing director of Reliance Industries Ltd (RIL) Anil Ambani.

Reliance Infocomm has attained a cash-breakeven in last five months on the back of its over 5 million customer base, a healthy average revenue per user (ARPU) of around Rs 500 and an attractive run-rate that includes 35,000-40,000 subscribers being added to its customer base every day.

Ambani said Reliance Infocomm, through its Reliance IndiaMobile service, has the largest marketshare of 21 per cent followed by Bharti and Bharat Sanchar Nigam Ltd at 19 per cent each.

The company has set a record in being successful in notching a net profit in the first year of its commercial operations, Ambani said. He further revealed that a leading corporate has placed orders for 2.5 lakh handsets from Reliance Infocomm.

According to Ambani, as Reliance Infocomm is on course to attain profits, there is no need for a capital infusion for its expansion plans from “outside, including RIL''.

On the group's initial intention to list Reliance Infocomm, Ambani said it was too early for an initial public offering. He also ruled out any further equity offering from RIL in the foreseeable future.

Ambani said Reliance Infocomm's entire customer base is currently on post-paid. The company is now eyeing the pre-paid market, where the potential to attract customers is even higher.

Gas reserves fuel growth

The contribution of oil and gas, which currently is only 1 per cent of RIL's gross turnover, is expected to shoot to around 15 per cent in three to four years.

A major contributor to the growth will be gas reserves in the Krishna Godavari basin, which is expected to bring incremental revenues of over Rs 10,000 crore to RIL annually.

Ambani indicated that the company would go ahead with its pipeline network for transportation of gas from Kakinada and made the case for transportation of gas on common carrier principle, a method followed worldwide.

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