Idea defends its negative revenue in Q4, blames it on changes in TRAI interconnection regulation

Idea’s gross revenue both for the quarter Q4FY15 and for FY15 is negatively impacted by ~Rs. 1050 million and cites its due to the changes in the TRAI Interconnect (IUC) regulations (Amendment XIth and XIIth) effective March 01, 2015, though the impact on EBITDA is minimal. Idea continues its enviable track record of being amongst the fastest growing large Indian Mobile operators with 19.1% growth in gross revenue in FY15 at Rs. 3,15,548 million, nearly 1.8 times the wireless industry revenue growth rate (CY14).

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Idea further revised Mobile Data Subscriber definition, eliminating from its reporting all incidental data users of less than 10 Megabytes/Month. The Mobile data user (2G+3G) penetration in overall base is now 21.2% at 33.4 million data subscribers with blended Mobile data ARPU (2G+3G) at Rs. 150 in Q4FY15 (v/s Rs. 104 in Q4FY14). The data ‘Average Realisation Per MB’ (ARMB) has remained largely flat at 25.7p/minute 25.3p/minute in Q4FY14).

The company doubled its 3G data subscriber base, adding 7.3 million new 3G users in last one year, servicing overall 14.5 million 3G data consumers. During the year, 3G Data volume exploded by nearly 2.3 times; from 13.1 billion Megabyte in Q4FY14 to 30.7 billion Megabyte in Q4FY15. To support the exponential Voice and Mobile Data growth, Idea capex spend for FY15 is Rs. 40.5 billion (excluding spectrum); adding 7,589 GSM sites and 8,910 3G cell sites and over 11,000 Km of high capacity optical fibre.

 

Inspite of TRAI reducing the Termination Charge from earlier 20p/minute to 14p/minute from other telecom operators (and no IUC charge on the calls originating or terminating to Wireline networks), the sequential quarterly revenue has grown by 5% in Q4FY15 (normalized QoQ revenue growth of 6.3%) driven by a) 9.2 million Active Subscriber addition (VLR Adds), b) sharp expansion of voice minutes @8.4% to 185 billion minutes and c) 18.3% Mobile data volume (2G+3G) growth to 54.5 billion Megabytes v/s Q3FY15; a clear testimony of strong consumer demand for Idea Mobile services.