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

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.

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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.