Idea Cellular Q1 profit plunges 74% to Rs 217 cr

Telecom operator Idea Cellular today reported a sharp decline of 74.5 per cent in consolidated net profit at Rs 217 crore for three months period ended June 30, largely on account of spectrum purchase.
The company had posted a profit of Rs 851.6 crore in the same quarter a year ago.
Idea Cellular however maintained that the financial results are not comparable due to one-time payment related to spectrum purchase.
The financial performance of reported quarter includes "full impact of spectrum acquired by Idea in March 2015 (Rs 30,140 crore investment) and February 2014 Auction (Rs 10,420 crore investment) for renewal of mobile licences in nine service areas expired between December 2015 and April 2016 as well as spectrum acquired for 3G and 4G services in multiple circles.

The company added that additional deferment consequent to the change in terms allowing its customers to carry forward unused data has negatively impacted the quarter's revenue by Rs 127.6 crore, EBITDA by Rs 110.1 crore.
"The slow growth trends of mobile sector continues. Similarly, this quarter industry revenue growth estimate indicates only 4-5 per cent annual growth. Idea revenue growth in first quarter of financial year 2017 also slowed down to 7.9 per cent," Idea said.

The total revenue of Idea Cellular, however, increased by 7.9 per cent at Rs 9,486.64 crore in the reported quarter compared to Rs 8,791.54 crore in a year ago.

The company said at the end of reported quarter over 18 lakh customers are actively using Idea 4G services. It said that 2.7 crore Idea customer base are using the company's 3G or 4G data services with 1.03 crore addition in last one year.
The overall mobile data users (2G, 3G & 4G) of the company reached 4.9 crore at the end of June 30, with blended mobile data average revenue per user of Rs 142 in the reporter quarter which was Rs 147 in same quarter a year ago.
The finance charges of company more than doubled to Rs 988.17 crore from Rs 441.5 crore during period under review. Besides, the company invested in launching 4G network for which it is yet to see returns.

Idea said its capital expenditure of Rs 1,080 crore in the reported quarter is in line with its guidance of Rs 6,500- 7,000 crore for ongoing financial year which was fully funded from cash profit of Rs 2,520.9 crore.
"The company's network now spreads to nearly 2,00,000 sites (1,27,835 sites for 2G services, 51,231 for 3G and 19,939 for 4G )...Covers nearly 1 billion Indians for GSM services over 3,94,000 towns and villages and wireless broadband services reach to 400 million Indians across 17 circles covering over 63,000 towns and villages," Idea said.
Another major component was depreciation and amortisation of assets which stood at Rs 1,919.16 crore during the reported quarter compared to Rs 1,411.68 crore in the same quarter a year ago.

Shares of Idea Cellular closed at Rs 103.1, down by 2.83 per cent on BSE.