Idea swings to profit in Q1 on one-time gain from tower sale
MUMBAI: Kumar Mangalam Birla controlled-idea Cellular Ltd on Monday reported its first quarterly net profit after six quarters of losses, on the back of a one-time gain on the sale of its 9,900 standalone telecom towers to ATC Telecom Infrastructure Pvt Ltd in May.
Idea Cellular reported a consolidated net profit of ₹256.5 crore for the June quarter, compared to a loss of ₹814.9 crore a year ago.
The company’s consolidated revenues from operations fell 27.9% to ₹5,889.2 crore on the back of the ongoing tariff war in the telecom sector and a steep reduction in domestic and international mobile termination charges (MTC) settlement rate.
According to a poll of 11 analysts, India’s fourth-largest telecom operator was expected to post a June quarter loss of ₹1,528.6 crore on sales (operational revenue) of ₹5,967.5 crore.
If not for the gain of ₹3,364.5 crore on its tower sale, Idea would have reported a loss of ₹3,108 crore for the three months ended June, a back-of-the-envelope calculation from the firm’s regulatory statement shows.
Telecom operators, already reeling from a fierce price war that started with the entry of Reliance Jio in September 2016, were hit hard in the December quarter, and subsequently the June quar-
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ter, after the telecom regulator’s decision to slash interconnection usage charges (IUC) levied by mobile networks handling incoming calls from rival networks.
The revenue for the quarter was impacted mainly on account of down-trending of the average revenue per user (ARPU), Idea Cellular said, adding that ARPU for the quarter stood at ₹100 compared to ₹105 in the March quarter.
During the June quarter, Idea Cellular’s competitors reported subdued ARPUS due to aggressive pricing prevalent in the industry. Bharti Airtel reported an ARPU of ₹105 for its India operations during the quarter. Reliance Jio, the telephony arm of Reliance Industries Limited reported an ARPU of ₹134.5 for the June quarter.