Idea Cellular net profit down 39%, revenue up 13%

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Idea Cellular, the country’s third largest telco, reported 39% decline in the net profit for the consolidated third-quarter at Rs 575.6 crore, compared to Rs 941.8 crore a year earlier. The company’s net profit for hurt by a sharp increase in depreciation & amortisation besides interest costs to service debt taken on spectrum buys, the company said in a statement, adding that the net profit was further dragged due to a cut in interconnect charges (IUC) and a cap on roaming rates.

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Idea’s revenue increased over 13% on year to Rs 9483.9 crore, from Rs 8422.5 crore, mainly on the back of a 175.1-million subscriber base. Interest and finance cost surged to Rs767.8 crore from Rs105.2 crore a year ago, mainly on the debt taken to finance buying airwaves from the 2015 auctions. Depreciation & amortisation expenses also jumped to 1973.7 crore from Rs1487.7 crore a year back.

Idea said that it clamped down on promotional offers in Q4FY16 for new and existing customers, which resulted in 4.4% improvement in voice realised rate from 31.8p/min in Q3FY16 to 33.3p/min. In addition, mobile data realised rate improved from 22.3p/MB to 22.9p/MB, with 2.9% sequential growth.

With reduced consumer promotions this quarter, the subscriber & volume growth was slower as only 1.9 million net quarterly subscriber addition took place. Idea has customer EoP base of 183.8 million (on VLR, 31st March, 2016. Further, the sequential voice minutes growth increased 1.2% to 201.6 billion minutes, while net mobile data volume (2G+3G+4G) grew @1.5% sequentially to 82.2 billion MB.

Inspite slow volume growth, the sequential quarterly revenue growth is robust @5.2%. The improved revenue growth led by better rate realisation helped Idea deliver strong 16.4% sequential quarterly EBITDA growth at Rs. 33,199 million for Q4FY16 and QoQ EBITDA margin improvement of 3.4%, from 31.6% in Q3FY16 to 35%.

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Telecom Analyst

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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