Telecom major Idea Cellular today announced a marginal decline in consolidated net profit at Rs 764.2 crore for the quarter ended December 2015 due to decline in voice and mobile data rates.
The company had posted a net profit of Rs 767.06 crore for the same period a year ago.
"Despite the healthy subscriber growth, we have witnessed intense rate pressure. Our voice rate declined by 10.6 per cent and mobile data rates by 17.2 per cent during the Q3 FY 16," Idea Managing Director Himanshu Kapania told reporters here.
The net sales increased by 12.37 per cent to Rs 9,009.69 crore during the reported quarter from Rs 8,017.47 crore.
A sharp 75.8 per cent growth in mobile data (2G, 3G, 4G) and 16.7 per cent expansion in voice minutes drove the revenue growth in the quarter.
During the quarter, it launched 3G service on its own network in 13 circles and launched its 4G services in four south Indian telecom service areas.
"The data ARPU (average revenue per user) of a 3G Data customer is at a healthy level of Rs 196 during third quarter of FY16, in addition to customer spend on voice and non data value added services," Kapania said.
The company is now looking at expansion aggressively. The 3G service has 28 million subscribers and it is hopeful of growing at a rapid space.
The company is also looking at launching 4G services in Maharashtra and Goa shortly and aims to cover 750 towns by June this year, Kapania said.
On capex plans, Kapania said the company has revised the capital expenditure guidance to Rs 7,500 crore compared to Rs 6,500 crore capex guidance given in Q2. The additional Rs 1,000 crore will be go into 4G infrastructure expansion.
"The capex spend in the third quarter of financial year 2016 of Rs 2,313.5 crore was financed by cash profit of Rs 2,349.30 crore for the quarter," he said.
The company's net debt increased more than three-fold to Rs 37,690 crore from Rs 11,089.1 crore a year ago.
The net debt includes Rs 31,000 crore of deferred payment liability from past spectrum auctions, including March 2015 auction.
Kapania pointed out that price pressure continued in
both voice and mobile data.
The fall in voice realised rate led by reduction in Trai-regulated mobile incoming IUC charge settlement rate, lowering of cap for national roaming call and SMS charges and intense pressure on mobile data realised are the reasons for pressure on the voice data, he said.
"However, we see prices of voice have bottomed out and it should improve from here onwards," Kapania said, adding that competition will intensify in mobile data once 4G is rolled out.
Shares of Idea Cellular closed at Rs 113.90, down by 3.02 per cent, on the BSE which ended 0.41 per cent down at 23,962.21 today.
