Idea's quarterly profit doubles as voice market continues to do well

Idea's quarterly profit doubles as voice market continues to do well
Advertisement
Idea Cellular Ltd's quarterly net profit doubled as it benefited from reduced competition and an increase in voice call prices in the world's second-biggest mobile phone market, but missed analysts' estimates.

India's No.3 cellular carrier by revenue and customers reported that consolidated net profit surged to 4.68 billion rupees for its fiscal third quarter ended December, it said on Monday.

Analysts had on average expected Idea to report a net profit of 5.13 billion rupees, according to data compiled by Thomson Reuters StarMine.

"The voice market continues to do well," Managing Director Himanshu Kapania said at a news conference after the results.

He said there was high competition in mobile data, resulting in lower margins from the segment. Carriers in India get more than 80 percent of revenue from the voice market, but mobile data services are growing faster as 3G networks expand.

Leading carriers including Bharti Airtel, Vodafone India and Idea last year raised voice call prices after a years-long price war and continue to cut discounts after a court order forced some smaller companies to shut down or scale back, helping reduce competition.

Idea, part of the Aditya Birla conglomerate, is favoured by some investors because of its focus on mobile services and the domestic market and it has lower debt compared with its rivals. But it faces a tough challenge from Bharti and Vodafone India, which are much bigger by revenue.

Idea, which is about a fifth-owned by Malaysia's Axiata, has applied to bid in a mobile phone spectrum auction starting February 3 and is expected to buy airwaves to roll out 3G services in areas where it does not have the capability.

High spending in the spectrum auction, which has seen interest from eight companies including the leading mobile carriers and cash-rich conglomerate Reliance Industries, is a risk for the carriers who will most likely fund it by taking more debt.

(Also see: GoM decides on 5 percent spectrum usage charge for new spectrum)

In-line revenue
Idea, the first telecom carrier to report results for the December quarter, said revenue for the quarter rose 19 percent to 66.13 billion rupees, in line with estimates. Analysts on average had expected revenue of 66.1 billion rupees.

Average revenue per user, a key operating metric for phone carriers, rose 3 percent from the previous quarter to 169 rupees, said Idea, which had 129 million customers as of December. Average realisation per minute grew to 0.449 rupees from 0.447 rupees a quarter earlier.

Shares in Idea, valued at about $8 billion, closed 5 percent lower ahead of the results, against a 2 percent fall in the broader Nifty. Both Idea and Bharti Airtel have underperformed the broader market this month, due to worries of fierce bidding in the mobile phone spectrum auction.

© Thomson Reuters 2014

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Airtel, Bharti Airtel, Idea, Vodafone, telecom
Android extends gains in key smartphone markets of US, Europe, and China: Kantar
Vodafone, Reliance Communications to skip some circles in spectrum auction
Share on Facebook Gadgets360 Twitter Share Tweet Snapchat Share Reddit Comment google-newsGoogle News
 
 

Advertisement

Follow Us

Advertisement

© Copyright Red Pixels Ventures Limited 2024. All rights reserved.
Trending Products »
Latest Tech News »