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Cisco Announces 1100 More Job Cuts, Total 6600 In 9 Months

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World’s largest networking gear firm Cisco on Wednesday said it would cut 1100 more jobs across geographies to reduce cost and transform itself more in to a software company.

The company said this while announcing its Q3 results for fiscal 2017.

Earlier, in the beginining of the fiscal year, in August the company had announced to cut 5,500 jobs across geographies. So, in total the company is slashing a total of 6,600 jobs and this will take effect by end of Q1 of 2018 fiscal year.

While slashing the jobs, Cisco said it believes the company will realize a total of $800 to $900 million in pretax charges.

“During the first nine months of fiscal 2017, we have recognized pretax charges of $614 million to our GAAP financial results in relation to this restructuring plan. We expect to recognize approximately $150 million to $200 million of pretax charges under this plan in the fourth quarter of fiscal 2017,” Cisco said.

In terms of the company’s earnings for the third quarter, Cisco posted a total revenue of $11.9 billion with revenues from its product unit remaining flat and that of services going down by 2%.

Geography wise, revenue from APJC that includes India, has dipped by 2% whereas Revenues from americas and EMEA remained flat, the company added.

Segment wise, except security and wireless, all other business units have shown a negative growth and Switching revenue increased marginally by 2%. Revenues from security and wireless, however, grew by 13% and 9% respectively.

Company’s revenues from NGN Routing, Collaboration, Data Center, and Service Provider Video revenue decreased by 2%, 4%, 5%, and 30%, respectively.

The net income of the company grew to $2.5 billion at the end of Q3 ended 29 April from $2.35 billion for the same period a year ago.

However, the company said its happy with its performance.

“I am pleased with the progress we are making on the multi-year transformation of our business,” said Chuck Robbins, CEO, Cisco. “The Network is becoming even more critical to business success as our customers add billions of new connections to their enterprises. We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure.”

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CorporateResults

Vodafone Posts Flat Revenue In FY17 Despite Tough Competition

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Despite touch competition and lucrative free offers from Reliance Jio Vodafone registered a flat revenue in FY 2017 as compared to its performance in FY2016. In 2017 the British born telecom firm posted revenues of Rs 42,956 crore compared to Rs 43,169 crore in FY 2016, showing a marginal dip of 0.5%.

If put in perspective, considering the humongous growth in data consumption across operators, this marginal dip in revenue appears significant. The operator ideally should have shown a better performance with an increase in revenue growth.

However, the entry of reliance Jio, has curtailed the growth of all the big operators in the country including Bharti Airtel and Idea Cellular.

Last week Idea Cellular posted a loss of Rs 325 crore attributing competition and free offer from the new operator. A week before that Bharti Airtel posted 72% dip in its Q4 profit.

For Vodafone in FY 2017, data consumption grew by almost 30% to record Rs 8467 crore revenue from data business showing a revenue growth of 5%. The company has a total of 66.9 million data users of which 43.5 million use more than 1 MB data per month. The company said its data consumption growth was driven by increase in smartphone penetration in its network. Of all the users, 35.5% use a smartphone, the company said.

Vodafone India’s data ARPU for 2017 was Rs 140 compared to Rs 160 in FY 2016. The company attributed this fall to the free data offer from the new entrant, read Jio.

“Amidst an unprecedented and intensely competitive environment, we delivered a stable while recording a strong gain of 0.7ppt in RMS YTD Dec 16; increasing our customer base past the 200 million subscriber mark; and expanding our Vodafone SuperNet 4G presence to 2,400 towns by utilizing the spectrum bought during the year, We continue to delight and reward customers with innovative and meaningful value propositions including SuperHour, exciting 4G offers, richer content under Vodafone Play and added benefits for Vodafone RED customers. We remain committed to playing our role in enabling Digital India by fulfilling the evolving needs of increasing volumes, speed and innovative solutions for both retail and enterprise customers,” said Sunil Sood, Managing Director and CEO, Vodafone India.

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CorporateNewsResults

Haunted By Jio, Idea Posts Q4 Net Loss Of Rs 325 Crore, Second In A Row

Jio-effect-idea-cellular

Idea Cellular posted its net loss for the second quarter in a row. In the Q4, Idea Cellular posted a loss of Rs 325 crore compared to a loss of Rs 386 crore in Q3. The company had posted a profit last in its Q2, a meager Rs 90 crore.

For Idea it was unprecedented as the Aditya Birla group had never seen any losses since its gone public a decade back. The company has been blaming the new operator for the loss.

Revenue wise too, the company posted a consolidated total of Rs 8126 crore in Q4 compared to Rs 8663 crore in Q3, showing a dip of 6.2%. This dip is lower compared to 6.9% decline it had posted in Q3 as compared to Q2 of 2017.

In Q3, 2017, Idea Cellular’s revenue was Rs 9300 crore.

For the full year of FY 2017, the company has posted a revenue of Rs 32,959 crore compared Rs 33,558 crore in FY 2016, showing a dip of 1.8%.

“The Indian wireless industry witnessed an unprecedented disruption in the second half of financial year 2016-17 (FY17) on account of free voice & mobile data promotions by the new entrant in the sector. The October to April 2017 interval can be best described as ‘Period of Telecom Discontinuity’, permanently changing mobility business parameters. Consequently, the revenue KPIs & financial parameters for all mobile operators have sharply declined in H2FY17,” the company said while announcing its Q4 and full year financial results.

“For the first time in its history, the flourishing Indian Mobility industry, is trending towards an annual revenue decline of ~2% in FY17 (vs FY16). With the new entrant starting to charge for its services, albeit very slowly, the sector is expected to return to growth in the next financial year,” it further added.

The company said it had to many drastic steps during the period to retain its existing subscribers who, could have been tempted to move to other operators.

In an effort to retain its existing mobile subscribers, Idea was forced to reduce its voice tariff by by 12.5% to 25.9 paisa/min (vs. 29.6 paisa in Q3FY17) as also steeply drop its mobile data rate by 27.6% to 11.5 paisa/MB (vs. 15.9 paisa in Q3FY17).

“However, the lure of free offerings by the new mobile operator resulted in lower than normal volume elasticity with sequential quarterly voice minutes growing by 10.3% to 231.4 billion minutes (vs. 209.8 billion minutes in Q3FY17),” said the operator.

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CorporateResults

Jio Effect : Idea Cellular Revenue Drops To Unforeseen Level

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Idea Cellular today announced its financial results for Q3 and what we witnessed today has not happened in the last 10 years for the Aditya Birla Group run operator. Even in its own terms, Idea Cellular admits the company’s revenue has dropped to an unforeseen level.

The company posted revenues of Rs 8663 crore in Q3 2017 compared to Rs 9300 crore in the previous quarter showing a dip of 6.9% sequentially. This dip was seen across it operating circles.

More shocking is, Idea posted a loss of Rs 386 crore in this quarter compared to a profit of Rs 90 crore in Q2. On a standalone basis too, the firm posted loss of Rs 479 crore compared to a profit of Rs 4 crore. This had never happened since 2007 when the company went public.

The company attributed this negative development to Reliance Jio, of course without exclusively naming it but referring it to as a new operator.

“The Indian mobile industry witnessed an unprecedented disruption in the quarter of October to December 2016, primarily due to free voice & mobile data promotions by the new entrant in the sector,” Idea said in a statement.

“Consequently, revenue KPIs and financial parameters for all mobile operators have sharply declined, and for the first time in its history the flourishing Indian wireless sector is trending towards an annual revenue decline of 3 to 5% in FY2017 (vs FY16). The sector can expect to recover revenues only once the new operator starts charging for its pan India mobile services.”

Idea Cellular said because of this new operator and the difficult trends in the industry it was forced to reduce voice rates by 10.6% per minute and mobile data rates by 15.2% per megabyte. The company also said that because of the free offering, both on voice and data, Idea lost 5.5 million mobile data users during this period.

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CorporateResults

Airtel Q3 Results: Net Profit Tanks To 54%, Revenue Flat

Bharti Airtel  office vasant kunj

The Airtel Q3 2017 results is a clear sign how predatory pricing can bleed the industry. The company’s net income plunged to a new low – 54.5%. The company posted a net profit of Rs 503 crore in Q3, 2017 compared to Rs 1108 crore for the same period a year ago.

If we make a quarter on quarter comparison, the Airtel Q3 shows even more troubled picture – a drop of 65.5% compared to the previous quarter. In Q2 2017, company’s net profit was Rs 1460 crore.

“The quarter has seen turbulence due to the continued predatory pricing by a new operator,” said Airtel India & South Asia CEO Gopal Vittal. “This has led to an unprecedented year on year revenue decline for the industry, pressure on margins and a serious impact on the financial health of the sector.”

Revenues for Airtel India in the Q3 2017 rose marginally to post Rs 18013 crore, an increment of 1.8% over Rs 17694 crore posted in the same period previous year. The company said the slowdown in mobile revenue growth
primarily due to free voice and data offering by a new operator.

Airtel was obviously referring at Reliance Jio without directly naming the new operator.

The consolidated revenue of Bharti Airtel, that includes businesses in India, South Asia and Africa has also dropped 3% to post Rs 23336 crore in Q3 2017 compared to Rs 24,066 in Q3 2016.

Airtel Q3 results also shows data consumption has gone up for the operator however, the mobile data ARPU has decreased during the quarter from Rs 200 in Q3 2016 to Rs 175 in this quarter. Data revenue, during this quarter, represented 22.8% of its total revenue showing a dip from the same period a year ago. In Q3, 2016 it contributed 23.1% to the total revenue.

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CorporateResults

Qualcomm Q4 Net Income Up By 51%

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San Diego based Chip maker Qualcomm’s Q4 net income rose by 51% which the company termed as ‘above the high end of its expectations’. The company posted Q4 net income of $1.6 billion for fiscal 2016 compared to $1.1 billion for the same period in fiscal 2015. Sequentially, the net income rose by 11%

The company said the growth was primarily driven by strong demand from China.

“Our fiscal fourth quarter EPS was above the high end of our expectations, reflecting new license agreements in China and strong chipset shipments,” said Steve Mollenkopf, CEO of Qualcomm.

Qualcomm’s Q4 revenue also saw a surge during this period. It reported a growth of 13% to post revenues of $6.2 billion compared to $5.5 billion in Q4 of fiscal 2015.

Sequentially the company’s revenue grew by 2%, from $6 billion in Q3.

The company believes this upward trend to continue in the next fiscal as well.

“We are forecasting continued growth of global 3G/4G device shipments in calendar year 2017, led by growing demand in emerging regions. We are well positioned to extend our mobile technology leadership and footprint into attractive growth opportunities, accelerated by our recently announced agreement to acquire NXP,” Mollenkopf added.

The company last week had announced to acquire NXP Semiconductors for $38 billion.

Qualcomm also reported that in Q4 it shipped 211 million smartphone chips as against its own estimate of 1950215 million. The company supplies smartphone chips to Android devices as well as to Apple.

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CorporateResults

Airtel Q1 Revenue Up 8%, Net Dips 31%

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Bharti-Airtel-And-Bharti-Infratel-To-Improve-Sanitation-For-50,000-Individuals-Across-405-VillagesBharti Airtel, country’s top operator, registered a revenue growth of close to 8% in its first quarter ended June 31 compared to the same period a year ago. In FY 2016 Q1 Airtel posted revenue of Rs 25,546 crore as against Rs 23,671 crore in for the same period of last fiscal registering a growth of 7.9%.

However, in terms of net profit the company saw a major dip. Airtel’s net profit for the reported period jumped 31% to touch Rs 1462 crore where as against the profit of Rs 2113 crore in Q1 of FY2015-16.

On standalone basis, revenues from India business for Q1’17 were registered at Rs 19,155 crore growing by 10.3% Y-o-Y (net revenues up 11.9% Y-o-Y). This was led by healthy growth of 9.1% in Mobile, 11.0% in Homes, 22.2% in Digital TV and 10.4% in Airtel Business on Y-o-Y basis. The Company has realigned its India segment reporting in line with management reorganisation. Consequently, Airtel Business also now includes the erstwhile Corporate fixed line voice and fixed line data business which was hitherto reported with Telemedia segment.

“The year has begun well with revenue growth of 10.3% Y-o-Y and continued revenue market share gains. In continuation of our Project Leap announcement, we have now transparently opened up our entire mobile network to our customers so as to partner them in striving to deliver a world class experience,” said Gopal Vittal, MD&CEO, Airtel India and South Asia.

Mobile Data revenues cross Rs 3,500 crore and at Rs 3,525 crore grew by 35.1% Y-o-Y, led by increase in the Data customer base by 19.1% and traffic by 54.9%. Mobile Broadband customers increased by 68.3% to 36.6 Mn from 21.7 Mn in the corresponding quarter last year. Data ARPU has moved up by Rs 21 Y-o-Y to Rs 202 in Q1’17, led by 28.1% increase in usage per customer. Mobile Data revenues now contribute to 23.7% of Mobile India revenues visà-vis 19.2% in the corresponding quarter last year.

Revenues from Africa business grew by 3.8% Y-o-Y. Data revenues at $ 154 million grew by 31.2% Y-oY, led by increase in Data customer base by 26.0% and traffic by 106.2%. Data ARPU increased to $ 3.2 from $ 3.1 in the corresponding quarter last year. Data revenues now contribute to 16.5% of overall Africa revenues vis-à-vis 12.9% in the corresponding quarter last year. Africa underlying EBITDA margin is up Y-o-Y by 3.6% to 22.5%. Active Airtel Money customer base at 8.6 million, boosting the total transaction value on Airtel Money platform by 62.0% to $ 5.1 billion.

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CorporateNationalNewsResults

Bharti Infratel Q1 Net Profit Up By 71%

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Bharti-Infratel-Q2-Net-Profit-Rises-25%-To-Rs-579-CrBharti Infratel posted its first quarter results on Tuesday and the company’s net profit has grown by 71% on a yearly basis.  For the June quarter the company registered net profit of Rs 756 crore as compared to Rs 442 crore for the same period a year ago.

This unusual growth can be attributed to the increase in the tenancy ratio during the period as operators rented more site to improve coverage.

The consolidated revenue of Bharti Infratel rose 7% to touch Rs 3211 crore compared to Rs 3003 crore in Q1 of 2015. At the end of the fiscal quarter, the company’s operating free cash flow stood at Rs 958 crore versus Rs 797 crore for the same period lasst year showing an improvement of 20%.

Both Ebit and Ebitda have also improved during this quarter. While Ebit improved 11% to reach Rs830 crore as against Rs 745 crore in Q2 of 2015, the Ebitda of country’s sole listed tower company was up by 9% from Rs 1408 crore in Q1, 2016 from Rs 1295 crore the compared period of previous fiscal.

“Indian Telecom industry is going through consolidation, we believe this would be good for the industry in the long run as the sector would require large investments by the operators in future to cater to the ever increasing data demand,” said Akhil Gupta, Chairman, Bharti Infratel.

“We are also seeing some early signs of implementation of the Government’s initiative on Smart City which we believe would provide opportunities to infrastructure companies like ours. Bharti Infratel and Indus Towers being the leaders are fully geared to serve our customers’ demand and to look at the new opportunities coming up on the infrastructure front,” he added.

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CorporateInternationalNewsResults

Vodafone Q3 Revenue Up 2.6 Percent Reaches £10.3 billion

Vodafone

Vodafone-Q3-Revenue-Up-2.6-Percent-Reaches-£10.3-BnVodafone Group Q3 total revenue was up 2.6 percent to reach £10.3 billion.

Vodafone Group service revenue was £9.2 billion and was up by 1.4 percent. Total revenue declined 5.5 percent, including a 0.2 percentage point negative impact from M&A, and a 7.9 percentage point negative impact from foreign exchange rate movements. On an organic basis Group service revenue increased 1.4 percent and, excluding the impact of mobile termination rate (‘MTR’) cuts, Group service revenue grew 2.1 percent.

Total revenue for Vodafone Europe declined 6 percent, including a 0.1 percentage point favorable impact from M&A and a 6.7 percentage point adverse impact from foreign exchange movements.

Vodafone now have 28.1 million 4G customers across Europe, 3.8 million of which were added during the quarter, and total data usage grew 60 percent year-on-year. Fixed service revenue grew 3.7 percent, driven by strong consumer broadband customer growth, particularly in high speed fibre and cable services which grew by 379,000 to 5.9 million in the quarter.

Vodafone India service revenue increased by 2.3 percent with the quarterly growth rate slowing due to further competitive pressure, impacting both voice and data prices and data customer growth. Excluding the impact of regulatory changes, including MTR cuts, roaming price caps and an increase in service tax, service revenue grew by 7.6 percent.

Total revenue for AMAP declined 3.5 percent, including a 10.9 percentage point adverse impact from foreign exchange movements. Service revenue in AMAP increased 6.5 percent, sustaining its strong track record of organic service revenue growth.

The main drivers behind this performance are customer growth, with 6.3 million customers added in the quarter, and strong demand for mobile voice and data services. Across the region voice and data usage increased 8 percent and 78 percent respectively, and the number of data users increased by 17 percent year-on-year to 128.7 million.

We have continued to make very good progress on Project Spring and are now nearing the end of the deployment phase having completed 92% of the mobile build. We have added 165,000 mobile sites, modernised 102,000 sites, and upgraded 91,000 sites to high capacity backhaul since the project began. In AMAP, our mobile build targets have already been achieved 3 months ahead of target.

Our Enterprise business has grown for the fourth consecutive quarter, with service revenue up 2.6 percent, supported by continued growth in mobile and an acceleration in fixed trends.

As part of Project Spring we have continued to invest in our global IP-VPN network and are present in 65 countries with 259 Points of Presence (‘PoPs’). Our market leading M2M services are now available in 29 markets.

The performance of the Group remains in line with management’s expectations. We therefore expect EBITDA to be in a range of £11.7 billion to £12.0 billion, and free cash flow to be positive after all capex, and before the impact of M&A, spectrum purchases and restructuring costs. Total capex is expected to be between £8.5 billion to £9.0 billion.

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CorporateInternationalNewsResults

Ericsson’s 2015 Sales Grows 8 Percent Thanks To Chindia

Ericsson – Hans Vestberg
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Hans Vestberg, president and chief executive officer, Ericsson, receives the 2016 Hunger Hero Award

Ericsson’s 2015 full year sales has grown by 8 percent to reach SEK 247 billion thanks to sales growth in India, North America and China.

India continues to be the top third country with 5% contribution to overall net sales in the FY15. Full year sales for India grew by percent over the previous year whereas year on year growth for India in Q4 is 34 percent.

The reported Q4 sales increased by 8 percent YoY to reach SEK 73.6 billion. In North America, mobile broadband investments remained stable, with additional hardware sales in the quarter. 4G deployments in Mainland China recovered after a weak third quarter.

The global cost and efficiency program is progressing according to plan, contributing to lower operating expenses YoY. Operating margin increased to 15 percent YoY with improvements in all segments.

Full year sales growth in India, North America and China as well as higher IPR licensing revenues were partly offset by lower sales in Japan, Russia and Brazil. Sales, adjusted for comparable units and currency, decreased by -5 percent.

Operating income, excluding restructuring charges, increased to SEK 26.8 billion with improvements in all segments. Cash flow from operating activities was SEK 20.6 billion and cash conversion was 85 percent.

The board of directors will propose a dividend for 2015 of SEK 3.70 per share, an increase of 9 percent compared to last year.

Hans Vestberg, president and CEO, Ericsson said, “Reported sales in the quarter increased by 8 percent YoY. Sales, adjusted for comparable units and currency, decreased by -1 percent. Sales in North America grew YoY as well as QoQ. Profitability improved YoY, with higher IPR licensing revenues and lower operating expenses as main contributors. Network Rollout continued on its path to sustainable profitability.”

We saw a recovery in Networks in the quarter. In North America, the mobile broadband investments remained stable, with additional hardware sales in the quarter. 4G deployments in Mainland China recovered after a weak third quarter.

Emerging markets such as India, Indonesia and Mexico remained strong while markets such as Russia, Brazil and parts of the Middle East continued to be weak, mainly due to macro-economic developments.

Investments in Europe were driven by the transition from 3G to 4G and capacity enhancements. Operators increased their investments in telecom core networks, driven by deployment of new service offerings such as VoLTE (Voice over LTE).

In the quarter, sales growth in Global Services was mainly driven by growth in systems integration and managed services while network rollout sales declined.

We ended the year with good YoY sales development in TV and Media which contributed to growth in Support Solutions.

Ericsson’s IPR strategy has been successful over the last five years as we have more than tripled our IPR licensing revenues. After the recent announcements of two important patent license agreements, we now have agreements with the majority of handset suppliers.

In 2015, we had good progress in all our targeted growth areas and we continued to invest in order to establish leadership. Sales grew by more than 20 percent YoY, reaching SEK 45 billion, corresponding to 18 percent of group sales.

The strategic partnership with Cisco, announced in the quarter, will give us strong end-to-end network solutions with a complete IP portfolio. As a result of the partnership, we will extend our addressable market and expect to generate $1 billion or more of additional sales by 2018. Additional sales are expected to be accretive to operating income in 2016.

Operating margin increased to 15 percent YoY with improvements in all segments. The major contributors to the profit improvement were higher IPR licensing revenues and lower operating expenses, mainly in networks.

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