Idea Cellular net loss at ₹1,285.6 cr in Q3
NEW DELHI: Idea Cellular Ltd said quarterly loss more than tripled to ₹1,285.6 crore as the nation’s telecom regulator halved interconnection fees and a tariff war sparked by Reliance Jio Infocomm showed no signs of abating.
The loss for the quarter ended December 31 was in line with the ₹1,280 crore average forecast in a Thomson Reuters survey of analysts. Idea Cellular, which is set to merge with the Indian unit of Vodafone Group Plc, reported a loss of ₹385.6 crore in the yearearlier quarter.
The cut in interconnection usage charge (IUC) reduced Idea’s revenue and earnings before interest, tax, depreciation and amortisation (Ebitda), an indicator of operating profitability, in the December quarter by ₹820 crore and ₹230 crore, respectively, the company said. The Telecom Regulatory Authority of India cut IUC to 6 paise a minute from 14 paise effective October 1.
The telecom regulator’s decision to slash interconnection rates—levied by mobile networks for handling incoming calls from rival networks— has worsened the financial health of an industry that is already reeling from a bruising price war triggered by the entry of Reliance Jio in September 2016.
“Clearly, IUC cut has hit the company. The numbers are weak and this is expected to continue for the next few quarters,” a telecom analyst said on condition of anonymity.
Idea’s bigger rival Bharti Airtel reported a 39% fall in December quarter profit to ₹306 crore. Reliance Jio, on the other hand, benefited from the IUC cut as more calls originate from its network t han terminate, and reported a profit of ₹504 crore in the December quarter, a first for the firm, from a loss of ₹271 crore in the preceding quarter.
Idea’s revenue from operations fell by 25% to ₹6,509.7 crore in the December quarter, from ₹8,662.7 crore a year ago. That is despite the company’s voice usage per user rising by almost a third to 509 minutes in the December quarter from 385 minutes in the year-ago period.
Ebitda in the quarter fell 44.2% to ₹1,223.3 crore from ₹2,191.7 crore in the year-ago period.
Average revenue per user (Arpu) fell to ₹114 in the December quarter from ₹157 in the yearago period. This is lower than its rivals — Reliance Jio recorded an Arpu of ₹154 while Bharti Airtel posted an Arpu of ₹123 in the December quarter.