 "A man speaks on his mobile phone as he sits in front of a shop displaying the Idea Cellular Ltd's logo on its shutter in Mumbai")
Idea Cellular, third largest telecom company in subscribers, posted a 39 per cent decline in net profit to Rs 575.6 crore in the quarter ended March, owing to higher finance costs. The net profit was Rs 941.8 crore in the same quarter a year before.
Finance charges jumped twofold to Rs 808 crore in January-March, from Rs 291.6 crore in the same quarter of 2015. Revenue increased 12.6 per cent to Rs 9,484 crore. Realisation from voice and data services came under pressure during the full year, though compared to the December quarter, there was a rise in the March one.
Net debt as on end-March 31 was Rs 38,750 crore, including all the deferred payment liability to the government for spectrum purchased in auctions.
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For the year ended March 2016, consolidated net profit declined by 3.5 per cent over the previous year, to Rs 3,080 crore. Consolidated annual revenue rose 13.9 per cent to Rs 35,981 crore.
The realised rate from voice services was 33.3 paise a minute, from 33.9p a year before in the same period. Realisation from data services declined to 22.9p per megabyte from 44.8p an Mb during the same quarter a year before. With the addition of fourth-generation technology (4G) services, mobile data consumption was 82.2 billion Mb and 298 billion MB through the financial year.
“With reduced consumer promotions this quarter, the subscriber and volume growth was slower,” Idea said. Net quarterly subscriber addition was 1.9 million, taking its customer base to 183.8 mn. The Ebitda (earnings before interest, taxes, depreciation and amortisation) margin was 38.1 per cent, from 34.7 per cent in the December quarter.
For voice services, average revenue per user (Arpu) was Rs 129, against Rs 135 in the same quarter a year before (though, sequentially up from Rs 125 in the earlier quarter). Average realisation per minute from voice, as noted earlier, has dipped from a year before. As for Arpu from data services, it was Rs 147 for the quarter against Rs 150 a year before; data realisation as noted earlier was well down.
Mobile data revenue was 20.1 per cent of all service revenue and non-voice revenue contribution rose to 28.3 per cent against 24.5 per cent in the March quarter of 2015. Data usage went up to 641 Mb, against 586 Mb last year in the quarter.
In December, the company launched its 4G LTE services. In the last 100 days of the financial year, this was introduced in 3,946 towns and villages in 10 service areas (Maharashtra & Goa, Andhra Pradesh, Madhya Pradesh & Chhattisgarh, Kerala, Haryana, Punjab, Karnataka, Orissa, Northeast and Tamil Nadu, including Chennai). As of end-March, about 680,000 customers were actively using its 4G service, says the company.
“The ever improving brand affinity, accelerated pan-India infrastructure expansion and strong cash flows are lead indicators of Idea’s ability to meet all volatile and ambiguous developments,” stated the company.
Beside 4G, it continued 3G expansion during the year. The 3G data volume rose 2.1 times, from 91.2 billion Mb in FY15 to 188.8 billion Mn in FY16. The company added 8.4 million 3G users in the year, now serving 22.9 mn such data customers. In FY16, Idea has more than doubled its past three years' average capital expenditure, with network investment of Rs 7,770 crore. It integrated 48,878 sites, the highest ever (14,466 2G sites, 19,769 of 3G and 14,643 of 4G), reaching a total of 191,536 sites.
The board of directors announced a six per cent dividend, an overall payment of Rs 260 crore (including dividend distribution tax).
The primary reasons that impacted mobile industry growth in FY16 were reduction of interconnection charges by the sector regulator, reduction in the upper cap for national roaming and SMS charges, and slower uptake for mobile broadband services against supply of 3G and 4G launches across the country, the company stated.
