Idea Cellular Reports Rs 1107.7 Crore Net Loss in Q2, Revenue Plunges 8.6%

By November 13th, 2017 AT 2:36 PM

Idea Cellular, India’s third largest telco on Monday reported Rs 11,077 million or Rs 1107.7 crore net loss in the second quarter ended September 30, 2017, as compared to Rs 90 crore net profit in a year earlier period. The net loss, however, has widened sequentially from Rs 815.9 crore net loss in the first quarter of this year.

Idea-cellular

While seasonal industry slowdown followed the past trends, as always ‘July to September 2017 quarter’ impact on Idea’s subscribers and revenue loss was more pronounced given its higher share of rural subscribers. This coupled with continued pricing pressure and GST change, resulted in overall company revenue declining to Rs 7465.4 crore, a reduction of 8.6% compared to Rs 8166.5 crore in the first quarter and Rs 9300.2 crore in a year earlier period.

Competitively, Idea said that it maintained its‘Subscriber Market Share’ (VLR) at 19.4% in August 2017 and ‘Revenue Market Share’ at 18.9% in the first quarter of FY18.

The telco, in a statement, said that the operating environment for Indian mobile operators remained challenging with unrelenting pressure on pricing, introduction of GST at 18% (compared to service tax @15%) and need for large investments to support the exploding data demand. “The significant financial pressure forced the sub-scale operators with limited or no 4G footprint to exit or combine with other operators, leading to faster than expected mobile industry consolidation,” it added.

With the steep decline in revenue, the EBITDA for the quarter declined by 19.9% to Rs 15,016 million compared to Rs 18,753 million in Q1FY18, largely due to lower revenue and higher operating cost related to ‘Roaming & Access’ (as outgoing minutes increased) and ‘Manpower’ due to annual increments. The EBITDA margin for the quarter declined to 20.1% from 23% in Q1FY18.

Additionally, the ‘Depreciation & Amortisation’ charge increased to Rs 21,143 million and ‘Interest & Financing Cost (Net)’ rose to Rs 11,829 million as the company continued to aggressively invest in expanding its 4G footprint.

The net debt as on September 30, 2017, stands at Rs 541 billion, including a large component of debt from DoT under ‘Deferred Payment Obligation’ for Spectrum acquired in auctions. The consolidated Total Comprehensive Income (including a proportionate share from Indus & ABIPBL) stands at a loss of Rs 11,077 million in the quarter against a loss of Rs 8,159 million in the previous quarter.

Idea is currently in the middle of merging operations with Vodafone India. “The merger of Idea and Vodafone India is on track,” the telco said on Monday, adding that in the meantime, it remains focused on tapping all the emerging opportunities in mobile voice, wireless data business, digital content and mobile banking, etc.

As industry operating tariffs tumble, voice and data volume growth partially compensated the steep rate fall, the telco said.

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Rahul
Rahul

Update I think Idea Shut Down Customer care Similar to RCOM.Can’t Speak to Any Executive for 3 Days Now.Also 59059 is says Seva Uplabdh nahin hai.Anyone knows what’s happening to Idea?

Nikhil
Nikhil

Any comments,Kaushik?

Kaushik
Kaushik

Well this result is slightly better than expectations. But still idea is in trouble, obviously network expansion is going at slower rate due to very low availability of cash flows. Once the merger is done there should be no problem, but Idea will not survive if the merger is not completed in a year from now.

Kaushik
Kaushik

Though i must say idea is doing positive moves to cut costs like terminating 3G spectrum sharing in circles where they have no 3G and instead going for 4G ICR with shared active infrastructure w. R. T. Vodafone. It may take 6 months for the effects to be seen. But merger will be the best solution for idea IMHO. Let’s hope they don’t get unnecessary and serious delays like rcom and Aircel.

Nikhil
Nikhil

Will Idea-Vodafone adopt 4G only strategy in two years from now onwards? They have liberasised spectrum, that’s why asking!!!!!

Kaushik
Kaushik

No, they will continue operating 2G, 3G and 4G for medium term, though investments in 3G will stop (because Idea + Voda 3G network combined already has very vast coverage). We won’t see any 4G only before 2020/21.

Nikhil
Nikhil

Till when they will deploy 2500Mhz spectrum?

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