Aditya Birla Group company Idea Cellular on Monday reported a 17 per cent fall in consolidated net profit to Rs 201 crore for the quarter ended December 31, from Rs 243 crore in the same quarter last year.
Increased financing costs due to huge investments in the 3G network played spoilsport. It also had to take a forex hit of Rs 31 crore, due to volatile exchange rates during the quarter. Revenues, however, grew 27 per cent to Rs 5,030 crore, from Rs 3,955 crore in the corresponding quarter last year.
Idea attributes this improvement to increase in subscribers, and corresponding growth in minutes.
The operator added around 24.5 million in one year, and has a total subscriber base of 106 million.
“The gloom which has been projected that there will be no more growth in subscribers and minutes, is not true. We have always maintained there is a lot of juice left in the voice business,” said Himanshu Kapania, managing director of Idea Cellular. The company has a net gain of 2.2 million subscribers through mobile number portability, since the one year that it has been active.
The margins on the other hand improved on a quarter-on-quarter basis, due to increased roaming revenue, and higher contribution of value-added services to the revenue. The average realisation per minute (ARPM) grew by 1.4 per cent. “This is better than our predictions. We expected it to grow by one per cent,” said Bhavesh Gandhi, telecom analyst at Indiainfoline. This also translated into an EBIDTA margin improvement by 1.2 per cent over the previous quarter.
None of this margin improvement has come from increase in voice rates by the company, as expected by analysts. The company revised promotional tariffs in July. “We believe that the exuberance over rate improvement is premature. The voice rates will remain flat or show only a marginal growth,” Kapania said.
Kapania also ruled out another round of tariff hikes in the near future. “Competitive intensity has not reduced as there are still far too many players. It would be difficult to revise tariffs further,” he said.