India's third largest mobile services provider Idea Cellular
posted nearly 64 per cent jump in its December quarter profit at Rs 767 crore,
helped by an increase in the total subscriber base.
The Aditya Birla Group company had posted a post tax profit
of Rs 467.73 crore at the consolidated level in the corresponding period last
fiscal.
Revenues were up 21 per cent at Rs 8,017.47 crore, with the
share of high margin data doubling to Rs 1,239 crore.
Idea Cellular Managing Director Himanshu Kapania said the
growth in the number of the subscribers, along with an improvement in the
margins, helped the company's bottom line.
There was a 3.6 percentage points increase in the pre-tax
margin at 37.1 per cent for the reporting quarter, which was attributed largely
to the new subscriber additions and higher data usage.
The average revenue per user (ARPU) increased by Rs 10 to Rs
179 during the quarter.
Idea serves 152 million subscribers overall, of which 34.2
million use mobile data services, he said.
Idea is about 20 percent owned by Malaysia's Axiata.
The company has been adding new users at a faster rate than
rivals Bharti Airtel and Vodafone India, with 2.58 million users joining it's
network in December.
The average data consumed per subscriber has shot up by 160
MB per user over the last year to 470 MB now, while the price realisations for
the company per unit are broadly flat.
On the voice side, which constitutes a bulk of the revenue,
Kapania said the pricing remained under pressure due to competition where over
five companies are jostling for market share.
During the reporting quarter, a change in the depreciation
policies for telecom equipment from ten years to nine years resulted in a Rs
262 crore hit for the bottom line, making the net profit look flat on a
sequential basis. The profit in September quarter Rs 755.88 crore.
Idea Cellular Chief Financial Officer Akshaya Moondra said a
rapid change in technologies in the telecom sector leads to quicker redundancy
in the equipment due to which the company decided to accelerate the provisions
towards depreciation.
The company repaid Rs 737 crore during the reporting
quarter, bringing its net debt down to Rs 11,089 crore. Equity to debt ratio at
the Ebitda level has been reduced to to 1:1.12, Moondra said, exuding
confidence that the stronger balance sheet will help it at the forthcoming
auctions.
Bidding For New Auctions
No new capital raising will have to be done for the
auctions, he added.
Kapania hinted that Idea will not bid aggressively, saying,
"there is no hurry to rush into anything" as sufficient spectrum is
available and more will be made available over a period of time.
The company's requirement towards renewal is 56 MHz, which
is only 10-12 per cent of the total spectrum available in the auction for the
renewal basis, he said, adding that there will only be three serious players
vying for this.
Reacting to the aggressive base price set by the Government,
Kapania said never has the telecom sector invested so much in a spectrum and
said that the total debt in the industry is already at Rs 2.70 trillion.
On its strategy regarding the faster 4G technology services
rollout, Kapania said the company's priority is to finish the 3G rollout plan
by taking the number of 3G supported-towers to 50-60 per cent from the current
30-40 per cent.
The company has a network of over 1.09 lakh towers, Kapania
said, declining to give a timeline by when the rollout will be completed.
The Idea scrip gained 1.10 per cent to close at Rs 170.35
per piece on the BSE on Tuesday
- See more at: http://www.businessworld.in/news/business/telecom/idea-cellular-quarterly-profit-jumps-64-per-cent/1717037/page-1.html#sthash.cu3fcbfl.dpuf
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