Idea Cellular, country's third largest telecom company, today posted an 88 per cent plunge in its consolidated net profit at Rs 91.46 crore in the September quarter due to higher expenses.
The company had reported a net profit of Rs 762.27 crore in the corresponding three months a year ago.
"Higher network running expenses due to accelerated expansion, increased subscriber acquisition and servicing cost, and multiple inflationary pressures resulted in overall operating cost increase," the cellular firm said in a statement.
The company further said that its margin was adversely impacted by one-time depreciation charges of Rs 1,954.3 crore and finance cost of Rs 875.3 crore. While the launch of 4G services in 10 circles and 3G in some areas also had its impact on margin.
The company's results are as per Indian Accounting Standard (Ind AS).
"With adoption of Ind AS, the financials of Indus (Joint Venture) and ABIPBL (Associate) are consolidated at PAT level only. Accordingly, the consolidated total comprehensive income, including 16 per cent share from Indus and 49 per cent from ABIPBL) stands at Rs 90 crore against Rs 757 crore in the second quarter...," Idea said.
The revenue of Idea Cellular, however, increased by 7.2 per cent to Rs 9,300.23 crore in the reported quarter from Rs 8,675.37 crore in the year-ago period.
The company said it is looking to increase its investment in the network by Rs 1,000 crore.
"The company is gearing up to expand its wireless broadband coverage using the spectrum won in recently concluded spectrum auction and plans to spend incremental equipment capex of Rs 10 billion in FY2017. With this, the capex guidance is revised from an earlier level of Rs 65-70 billion to Rs 75-80 billion," Idea said.
With purchase of additional spectrum across various frequency bands, it now intends to offer pan-India wireless broadband services (3G, 4G) by March 2017. At present, Idea offers 3G and 4G services in 17 out of 22 telecom circles in the country.
"4G services will be expanded to 20 service areas from present 11 (9 new 4G service areas of Gujarat, Uttar Pradesh (West), Uttar Pradesh (East), Bihar & Jharkhand, Rajasthan, Mumbai, West Bengal, Assam and Jammu & Kashmir) and 3G services to 15 service areas from present 13 (2 new service areas of Bihar and Rajasthan)," it said.
The company saw pressure on phone call business as well as revenue from high speed mobile data services.
Due to competitive pressure on voice business, Idea's sequential voice revenue declined 5.3 per cent due to voice realisation rate decline at 3.4 per cent, from 34.3 paise in first quarter of 2017 to 33.1 paise per minute in previous quarter.
The company said it added 50 lakh new mobile data
customers taking the total number of data users on its network to 5.4 crore at the end of quarter.
However, the company reported a decline in realisation rate by 11.2 per cent on sequential quarter basis.
The blended mobile data average revenue per user (2G,3G and 4G) stood at Rs 130 compared to Rs 144 in the same period a year ago but data usage per subscriber increased to 694 MB in the reported quarter from 615 MB in last fiscal.
"Mobile broadband data volume (3G+4G) has grown exponentially at 85.5 per cent... 3.1 million customers are actively using Idea 4G services, out of 19.3 million 4G device owners in Idea's overall subscriber base," the company said.
Idea said it has over 2.16 lakh sites which include -- 1,30,633 2G sites, 60,467 3G sites, 24,945 4G sites.
The company added 5,006 mobile sites for 4G service and 9,236 sites for 3G service during the quarter.
The net debt at the end of reported quarter stood at Rs 36,400 crore, including all payment obligation due for spectrum excluding auction commitment made in October 2016.
The total commitment of Idea for October 2016 spectrum auction is Rs 12,800 crore and the company has opted for deferred payment option after making upfront payment of Rs 6,400 crore on October 20.
Shares of Idea closed at Rs 77 a unit, down 3.75 per cent compared to the previous close on the BSE today.
