RCom gets high investor rating points on launch of DTH services

Reliance Communications gained 3.43% to Rs 413.50 at 11:35 IST on BSE after its subsidiary Reliance Big TV launched direct to home services on Tuesday, 19 August 2008.

On BSE, the counter clocked volumes of 10.07 lakh shares. The scrip had an average daily volume of 24.90 lakh shares in the past one quarter.

The stock hit a high of Rs 418.80 and a low of Rs 403.60 so far during the day. The stock had a 52-week high of Rs 844 on 10 January 2008 and a 52-week low of Rs 381.05 on 3 July 2007.

India's second listed largest telecom services provider by sales had underperformed the market over the past one month till 18 August 2008, sliding 5.24% compared to the Sensex's return of 7.41%. It also underperformed the market in the past one quarter, declining 31.48% compared to Sensex's decline of 16%.

The company has an equity capital of Rs 1,032.01 crore. Face value per share is Rs 5.

The current price of Rs 413.50 discounts its Q1 June 2008 annualised EPS of Rs 6.73, by a PE multiple of 61.41.

According to Reliance Communications (RCom), Reliance Big TV is India's first fully digital home entertainment service offering more than 200 television, movie and music channels in English, Hindi and six other Indian languages at its launch stage.

Presently Tata Sky, Dish TV, Sun TV and DD Direct provide direct to home (DTH) service to a total of 60 lakh households. Apart from the existing players, Bharti and Videocon are also planning to launch DTH service in the next few months.

Reliance Communications (RCom) reported 23.9% growth in consolidated net profit to Rs 1512 crore on 23.7% growth in revenue to Rs 5322 crore in Q1 June 2008 over Q1 June 2007. The company's Q1 June 2008 net profit rose at the slowest pace in the past nine quarters.

RCom's average revenue per user (ARPU) declined by as much as 25% in Q1 June 2008 over Q1 June 2007. It added nearly five-million users during Q1 June 2008.

On 19 July 2008, RCom called off tie-up talks with South Africa's MTN Group owing to certain legal and regulatory issues. Accordingly the two firms mutually decided to allow the exclusivity agreement for tie-up talks to lapse. MTN and Reliance Communications had earlier agreed on 9 July 2008 to extend their merger talks until 21 July 2008 in a bid to reach an agreement.

RCom provides telecommunication services. The company provides wireless, wire line, voice, data and Internet communication services