The Indian Broadband adoption efforts received a further boost this quarter with the Telecom Commission’s approval of the National Optical Fibre Network proposal valued at US$ 4.4 Bn. As per the Government announcement, the proposal now awaits the Union Cabinet approval. The state owned Bharat Sanchar Nigam Limited (BSNL) has been entrusted with the task of preparatory activity for the project execution. We believe this development, which is a part of the National Broadband Plan to reach 160 million broadband connections by 2014, is a major step forward in the proliferation of broadband in India and follows the recent launch of 3G services by private telecom operators in India.
Our growth this quarter has been modest; we saw our advertising revenues in India grow 6%; total India revenues, which include fee-based and online advertising revenues, also grew 6% for the quarter, while our global revenues grew 4% for the quarter, in each case over the same quarter last year. Certain sectors of the economy like Financial Services, Insurance and Telecom in which our clients operate, have witnessed challenging conditions over the past several months which is believed to have impacted their advertising spending. As a result, we saw declines in sequential top-line performance this quarter.
“While we wait for the broadband implementation and growth to take shape, we continue to focus on our strategy of growing our user base. Our recently launched initiatives include Rediff Deal Ho Jaye!, with presence in 41 cities offering consumers 30% to 70% discounts across over 72 service categories, and our Rediff Local TV ad network, where we are currently tied up with two channels and a distribution network of nine cable operators covering six cities. Additionally, for our paid mobile mail service, Rediffmail NG, we remain in discussions with leading telecom operators in India to expand the availability of this service. We believe these initiatives will strengthen our position in the Indian Internet market, both now and into the future” said Ajit Balakrishnan, Chairman and CEO of Rediff.com.
In our efforts to increase the footprint of these initiatives, we expect to continue to invest approximately $2.0 – $2.5 million per quarter for the next few quarters.
Our cash balance stood at $35.9 million, as of June 30, 2011, which provides sufficient working capital to meet our liquidity needs and to execute on our strategy, including investments in product development, sales diversification and the entrance into new markets.
Further details of Rediff.com’s results for the first fiscal quarter ended June 30, 2011 are appended in tabular form to this press release. A script of the earnings result conference call held on July 26, 2011 will also be made available on Rediff’s Investor Information website at investor.rediff.com.