Aditya Birla Group’s Idea Cellular, which is in the final leg of the merger process with Vodafone India, on Saturday reported a net loss of Rs 1,018 crore on a standalone basis during the January-March quarter. This is its sixth straight quarter of reporting losses, as it continues to reel under the pressure of below cost tariffs unleashed by Reliance Jio.
In addition, during the current quarter, the company was also impacted by the cut in international termination rate brought about by the Telecom Regulatory Authority of India since February.
However, the operator managed to narrow its net loss to Rs 1,018 crore from Rs 1,352 crore during Q3 FY18, when it was impacted by a 57% cut in domestic mobile termination charge also brought about by the Trai. Lower, below-cost tariff as a result of bundled data and voice plans, which has seen most consumers move to lower packs, saw the company’s standalone revenue decline at Rs 6,137.3 crore during the quarter, which is lower by 5.7% compared to the preceding quarter.
The company said its revenue during the quarter was impacted by Rs 52 crore due to the cut in international termination rates from 53 paise a minute to 30 paise per minute with effect from February 1. On key operating metrics, Idea also witnessed the same trend as other operators like Bharti Airtel have been witnessing — lower bundled voice and data packs leading to higher volumes of consumption of both voice and data on the part of consumers but lower realisation (average revenue per user) for the operators. The company said though there has been a sharp rise in volumes, voice rate declined by 20% QoQ to 13.4 paise per minute (vs 16.8 paise in Q3 FY18). Similarly, mobile data rate fell by 1.4 paise per MB, down 31.4% against 2 paise per MB in Q3 FY18.
Even as Idea got hit on the revenue and profit front, the company managed to increase its Ebitda during the quarter, which rose 18.3% QoQ to Rs 1,447 crore, while Ebitda margins were up at 23.6% compared to 18.8% in the preceding quarter. The company blamed its and the industry’s woes on new competitor Reliance Jio. It said aggressive price plans to retain existing subscribers against abysmally low priced plans offered by the ‘new 4G operator’ exploded the voice and data volume growth multifold. “But this led to a sharp decline in consumer Arpu resulting in industry adjusted gross revenue (AGR) falling by nearly Rs 32,200 crore at the rate of 21.7% (calendar year 2017 vs 2016). Idea had the lowest drop in AGR revenue market share from 20% in 2016 to 19.5% in 2017 among the top industry operators despite major gains by new 4G operator,” it added.
Idea’s per capita voice and data consumption registered a healthy growth during the March quarter. Voice consumption per subscriber per month rose by 13.4% QoQ to 577 minutes per subscriber. This is against a usage of 670 minutes by Bharti Airtel subscribers and 716 minutes by Jio. Data consumption grew 27.9% sequentially to 6065 MB per subscriber in Q4 FY18, which is slightly lower than Bharti’s 6,586 MB for the same period. Jio’s per capita data consumption stood at 9,700 MB. Similarly, total voice volume for Idea grew by 16.9% QoQ to 330,364 million minutes in Q4 against 372,180 million minutes reported by Jio and 592,657 million minutes by Bharti. Total data consumption on Idea’s network rose a healthy 43.2% sequentially to 818,085 million MB as compared to 1539,746 million MB by Bharti and 5060,000 million MB by Jio.