Idea Cellular posts net loss of Rs 962 cr in Q4

Rajesh Kurup Mumbai | Updated on April 28, 2018

This is the telecom’s sixth straight quarterly loss

Idea Cellular has posted a consolidated net loss of Rs 962.20 crore for the fourth-quarter ended March 31, 2018, a near three-fold rise from Rs 327 crore posted for the same period a year ago.

The company cited the financial stress in the telecom sector, including aggressive price plans, fall in termination charges and low priced plans offered by new 4G operator as reasons.

The company’s total income fell to Rs 6,387.7 crore during the quarter under review, from Rs 8,194.5 crore recorded during the same period a year ago, the company said in a release. On a standalone basis, the Aditya Birla Group company’s net loss stood at Rs 1,017.9 crore on a total revenue of Rs 6,137.3 crore.

The Indian mobile industry witnessed another year of hyper-competition as well as high regulatory headwinds. The super aggressive price plans including the deep discounted unlimited voice bundled data plans, offered by most of the incumbent operators to retain existing subscribers against abysmally low priced plans offered by new 4G operator, exploded the e-voice and data volume growth multi-folds, Idea said in a statement.

But this led to a sharp decline in consumer ARPU resulting in industry Adjusted Gross Revenue (AGR) falling by nearly Rs 32200 crore at 21.7 per cent (CY17 vs CY16), it added.

Idea had the lowest drop in AGR Revenue Market Share from 20 per cent in CY16 to 19.5 per cent in CY17 among the top three industry operators in spite of major gains by new 4G operator.

However, these trends are not reflective of the emerging long-term opportunities offered by the sector such as multi SIM users are consolidating their usage to a single operator, subscribers are increasing or upgrading to higher broadband usage and nearly 300-400 million Indians, primarily in the rural hinterland, are yet to adopt mobile telephony services.

During the year, the dual negative factors of steep reduction in domestic and international mobile termination charge settlement rate and unrelenting rate pressure on voice and mobile data services as high ARPU consumers migrate to lower priced ‘unlimited voice bundled data plans’ resulted in 20.5 per cent decline in Idea’s gross revenue in FY18 to Rs 28,278 crore.

The company remains cautiously optimistic on India growth story and continues to expand its scale of operations, this tumultuous phase impacted Idea’s EBITDA during the current financial year by 41 per cent to Rs 60,47 crore.

On April 24, Bharti Airtel reported a 78 per cent fall in fourth-quarter net profit to Rs 83 crore, compared with Rs 373 crore recorded in the corresponding period the previous year.

Published on April 28, 2018

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