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Idea Q3 net profit up 14% to Rs228 crore; rules out major tariff hike

Idea Cellular said it would review call tariffs but ruled out headline tariff change in the short-run

 

Mumbai: Idea Cellular, the country's fourth largest telecom operator, which reported 14% rise in consolidated net profit at Rs228.6 crore for the October-December quarter, ruled out any headline tariff change in the short run, reports PTI.

 

It had reported net profit of Rs200.98 in the third quarter of 2011-12 fiscal.

 

Total income of the Aditya Birla Group company, which is partly owned by Malaysia’s Axiata Group, rose 11% to Rs5,578.58 crore during the quarter, from Rs5,030.82 crore in Q3, last fiscal.

 

Despite tepid numbers, this is the third straight quarter of earnings growth for the mobile operator.

 

“In spite of regulatory interventions impacting subscriber acquisition and value-added services business model, we could report a sequential quarterly revenue growth of 5%. The margins were lower in Q3 due to inflationary costs like diesel and electricity price hike and higher expenditure on advertisements,” Idea Cellular managing director Himanshu Kapania told reporters here last evening.

 

On the tariff hike plan, Kapania said it will review tariffs but ruled out headline tariff change in short-run. “We will wait and see how low price operators decide on their tariff.”

 

The quarterly revenue growth is led by expansion of voice minutes by 5.2% to 132.2 billion minutes, compared to 125.6 billion minutes in Q2, indicating consumer demand for voice telephony remains robust. The company clocked 2.9 million VLR (visitor location register) subscriber additions in Q3 against 0.6 million in Q2, despite implementation of stricter verification norms.

 

Contrary to expectations, the average realised rate per minute (ARPM) fell in the quarter to 41.1 paise against 41.3 paise per minute in Q2. The challenge on ARPM is on account of the fall in the non-voice revenue contribution to 14.6%, driven down 1% over the last quarter, by TRAI's new VAS regulation, Kapania said.

 

Adverse currency movement has resulted in a forex loss of Rs13.3 crore during the quarter, as against a forex gain of Rs18 crore in Q2, reflected in increased interest and finance cost (net).

 

In the 1,800 MHz spectrum auction in November, the company won back spectrum in all seven service areas for which licences were quashed by the Supreme Court, at a bid amount of Rs1,984.8 crore for a period of 20 years, ensuring continuity of services to more than 8 million customers, Kapania added.

 

Idea continues to invest in long-term value creators—it set up 2,961 new tower sites (2G+3G), expanded optical fibre network to 71,600 km and strengthened network capacities in NLD, ILD, ISP, data services and devices.

 

Of the 114 million subscriber base, the number of Idea customers adopting data services has grown to 21.75 million, contributing 5.7% to service revenue.

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