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Our Bureau

Mumbai, Oct. 20 Telecom service provider Idea Cellular Ltd on Monday reported a 34.6 per cent dip in consolidated net profit for the second quarter ended September 30, due to higher costs associated with its expansion in new circles and the volatile forex environment.

For the September quarter, the company recorded a net profit of Rs 144 crore as against Rs 220.3 crore reported in the year ago period.

Revenues were up by 47 per cent to Rs 2303.3 crore (Rs 1564.3 crore).

There has been an across-the-board increase in costs for Idea Cellular; total expenditure jumped by 60 per cent to Rs 2000 crore vis-À-vis Rs 1252 crore in the corresponding year ago quarter. The company launched its telecom services in Mumbai and Bihar circles last quarter; it also increased the spend on brand building initiatives. In Mumbai itself, the company is estimated to have made a media spend of about Rs 40 crore. In addition, Idea incurred foreign exchange loss of Rs 18.7 crore for the , the company said in a presentation to analysts.

In a separate development, the city-based company said that its board has given an in principle approval to spin off its united access service licences of Punjab and Karnataka circles ‘to an eligible transferee’ through a court approved scheme of de-merger. However, further details on who the eligible transferee would be was not available. Earlier this year, Idea acquired Spice Communications which provided mobile telephony services in Punjab and Karnataka. However, Idea too has licences for offering services in these two circles. As per regulations, no operator can have more than 10 per cent holding in two different licence holding telecom companies in the same circle.

The Idea Cellular scrip was down by 1.9 per cent to close at Rs 61.8 on the BSE today.

More Stories on : Financial Performance | Telecommunications | Idea Cellular Ltd

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