Idea pares losses 22% to Rs 236 cr

Idea Cellular Ltd, the telecom company having equal equity participation by the Aditya Birla group, the Tatas and the US-based AT&T Wireless Services, has managed to reduce net loss by 22 per cent to Rs 235.70 crore in the financial year ended March 31, 2004 from the previous year's Rs 302.26.

Sources in the Birla group attributed the reduction in loss to an 113 per cent growth in subscriber base which pushed up revenue by 38 per cent.

The company's subscriber base went up to 27.3 lakh from 12.8 lakh while revenue grew to Rs 1,312.90 crore from Rs 951 crore.

The growth in subscriber base as well as revenue was higher last year than the previous year.

The number of subscribers and revenue grew by 58 per cent and 26 per cent respectively in 2002-03.

The cellular industry saw a 106 per cent growth in subscriber base, from 127 lakh to 261 lakh, making it one of the fastest growing sectors.

Idea Cellular, which is set to witness a change in ownership structure with Singapore Technologies Telemedia and Telekom Malaysia jointly deciding to acquire AT&T Wireless Services' stake, registered spurt in cash profit to Rs 95.9 crore in 2003-04 from Rs 1.8 crore in 2002-03.

Profit before depreciation, interest and tax (PBDIT) went up by 54.4 per cent to Rs 392 crore in 2003-04.

The proposed change in ownership structure follows the restructuring of AT&T which has been taken over by Cingular Wireless.

The Singapore Technologies Telemedia-Telekom Malaysia combine decided to take over AT&T's stake for $ 200 million.

The two south east Asian telecom companies would form a holding company to acquire AT&T's equity. It is learnt the alliance would also hike its holding in Idea Cellular to 49 per cent, the maximum permissible limit for foreign direct investment in the telecom sector.

In that case, the shareholding of the Tatas and the Birla group will come down from the current level of 33 per cent each.

Industry sources said the Indian partners were not so keen in continuing their association in Idea Cellular.

The Birla group had said it was a financial investor and might exit the company at a good price.

The Tatas have been focusing on the technology business conducted through Tata Teleservices.

Idea Cellular targets a 50 per cent rise in revenues to Rs 2,000 crore at the end of the current year through organic and inorganic growth.

The company had acquired Escotel Mobile Communications. It is also in talks to acquire Aircel.