Uninor achieves break-even in Uttar Pradesh West, Bihar and Jharkhand

Uninor on Thursday said that it has achieved its financial break-even in the two circles of Uttar Pradesh West and Bihar and Jharkhand.

With this, five out of Uninor's six operating circles have now achieved profitability.

The company said that it has 5.2 million subscribers in Uttar Pradesh West and 4.3 million subscribers in Bihar circle.

The company has attributed this to the lower costs per minute (upto 40% lower) and sabse sasta tariffs (upto 60% cheaper).

Uninor has also announced that it will continue to offer tariffs that are cheaper than those of its competitors in its operating circles - Sabse Sasta will continue.

Uninor has now achieved its EBITDA break-even in the circles of Uttar Pradesh West, Uttar Pradesh East, Bihar (and Jharkhand), Andhra Pradesh and Gujarat. The Maharashtra (and Goa) circle too is well on its way to achieve this milestone within the committed timeframe of calendar 2013.

"Uninor is well on its way to meet a commitment of pan-India breakeven that was made 3 years ago when we started. In the process, we have been able to bust prevalent myths that efficiency needs scale and profitability needs high-end services with expensive tariffs," said Yogesh Malik, CEO of Uninor.

He further added, "We also prove the success of our model in diverse markets - equally in circles like Gujarat and AP with lower energy costs and higher ARPUs and UP and Bihar with higher costs and lower ARPUs."

In Uttar Pradesh West, Uninor now has a network of over 2890 sites and a retail footprint of 56,285 points of sale.

"In UP West, Uninor enjoys the highest revenue market share among all its circles. Our plan now is to expand farther into smaller towns and villages of less than 5000 population with our network and retail presence," said KC Narendran, Circle Business Head for UP West.

At the time of break-even, the company has serves 4.3 million subscribers with a network of 2442 sites and 50,000 points of sale. It is important to note that in each of its circles, Uninor operates only in the pre-paid segment and serves the mass market with basic services.

"We are proud to dispel the myth that telecom investments in Bihar and Jharkhand circle are unattractive from a financial viewpoint. With our break-even, we prove that investing in a market with low ARPUs and needing affordable services the most can be a financially prudent decision," said Abdul Jameel, Circle Business Head for Bihar and Jharkhand.

The company has also started its next phase of business expansion across its circles. In this phase, the company will expand its network and retail presence with a focus on the rural markets.

Uninor has also introduced new and unique innovations in its sales and distribution to take the company's services into rural markets.

In Uttar Pradesh East, the company has launched a concept of micro-distributors - one person business serving as distributor, retail executive and activation officer combined. 45 such Micro-distributors are now taking Uninor's SIMs and recharges to rural retailers and subscribers.

In Gujarat, Uninor has launched a full program called "Gaam No Faydo, Uninor No Vaydo" that entails the company's largest ever expansion into rural Gujarat.

Across the six circles, Uninor has also launched Express Stores - low cost small format exclusive franchisee shops that take 7 days to set up. The company now has 879 such Express Stores in its circles.

"We view break-even as a milestone - a proof of concept of our strategy and model. As we achieve this in our circles, Uninor is also embarking on a major business expansion. Our ambition is to scale up and grow both deeper and wider in each of our six circles - increasingly into rural markets where affordability is key," said Malik.