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Buoyed by a strong growth in volumes both in voice and data, Idea Cellular, India's third-largest telecom services player by revenue market share posted a 16.2 per cent year-on-year (year-on-year) increase in consolidated revenue at Rs 7,043 crore for the quarter ended March. Sequentially, the company recorded a 6.5 per cent growth. While voice minutes grew 9.8 per cent y-o-y to 157 billion minutes, data volumes were up 138 per cent y-o-y to 27.3 billion MBs.
Better revenue performance trickled down to the operating level and the company recorded 33 per cent y-o-y growth in earnings before interest, taxes, depreciation, and amortisation (Ebitda) to Rs 2,230 crore. Sequentially, the growth was about 10 per cent with margins inching up 60 basis points (bps) to 31 per cent. The company has done some cost rationalisation given that employee expenses are down 10 per cent on a sequential basis.
Better operating performance meant net profit nearly doubled on a y-o-y basis and grew 26 per cent sequentially to Rs 589 crore on a consolidated basis. Although interest costs were up 25 per cent on a sequential basis, it is down 12.5 per cent, y-o-y, to Rs 196 crore. Analysts say the results were slightly ahead of expectations.
For the full year FY14, Himanshu Kapania, managing director of Idea Cellular, highlighted good subscriber growth, higher realised rate, improved voice volumes as well as contribution from value-added services (VAS) which have helped it achieve improve performance. While VAS contribution to revenues improved from 120 bps y-o-y to 16.2 per cent, data contribution increased from 5.5 per cent to 8.9 per cent. Margin improvement on a y-o-y basis is due to lower competition, leading to a fall in churn to five per cent from 7.8 per cent a year earlier.
Given the lower churn and a surge in subscriber growth, the management has indicated that promotional expenses going ahead are likely to come down.
After five straight quarters of growth, revenues per minutes on a sequential basis fell 2.8 per cent to 43.6 paise. Attractive promotional tariffs in circles where it is weak has led to the same. Kapania said the company was weak in some circles with low market share.
VOLUMES UP
- Voice minutes grew at 8.6% to 157.1 billion minutes on a quarterly basis
- Mobile data volume (2G and 3G) grew at 31% to 27.3 billion MB quarterly
- 17.7 million net active subscribers in 2013-14 against 14.9 million in 2012-13
