Idea Quarterly numbers

Idea Cellular reported a 12.8% sequential decline in gross revenue in the third quarter, while average revenue per user or ARPU fell by 13.6% to 114 rupees.

However, the decline was less than that reported by bigger peer Airtel.

Against the 13.6% fall in ARPU reported by Idea, Airtel’s ARPU had declined by 15% during the quarter to Rs 123.

Idea said its total revenue fell by 12.8% to Rs 6,510 from Rs 7,465 cr in the preceding quarter and Rs 8,657 in the same quarter last year.

This too was slightly lower than the 13.4% fall seen in Bharti Airtel’s India mobile revenue.

Idea’s net loss increased to 1,284 cr from 1,107 cr in the previous quarter. Last year, it had a net loss of Rs 384 cr.

Pretax loss, before accounting for joint venture income, increased to Rs 2,067 cr from Rs 1,796 cr in the previous quarter.

Idea blamed the poor show on “the dual negative factors of a steep reduction in mobile termination charge settlement rate and unrelenting rate pressure on voice and mobile data services as high ARPU consumers migrate to unlimited voice bundled data plans.”

EBITDA or operating profit for the quarter declined by 18.5% to Rs. 12,233 million compared to Rs. 15,016 million in Q2.

“In the meanwhile, company remains focused to optimize its operating costs in the new sector paradigm,” it said.

If the mobile termination charge had not been cut, it said EBITDA would have declined by only 3.2% on quarter.

The EBITDA margin for the quarter declined to 18.8% from 20.1% in C2FY18.

The “voice realization rate” fell 23.6% to 16.8 paisa per minute from 22.0 paisa in the preceding quarter.

“Mobile data realization rate”, or the average price of data, fell to 2 paisa per MB, or about Rs 20.50 per GB. This represented a decline of 27% vs 2.7 paisa per MB in Q2FY18.

As a result, it saw a strong uptick in consumption. Last year, an average Idea customer consumed only 703 MB/month, which has increased to 4,742 MB during this quarter.

Idea also saw its highest ever wireless broadband subscriber addition of 5.2 million in O3FY18, just short of the 7 mln that Airtel reported, but well below the 21 mln that Jio reported.

It now has 34.8 million wireless broadband subscribers, compared to about 160 mln with Jio and about 65 mln with Airtel.

Mobile data volume (26+3G+4G) Continued to witness robust sequential growth of 30.2%. Last quarter, it had grown 73.5% and in the one before, by 99.1%.

A total of 571 billion MB of data was carried on the network, compared to 1,100 bln for Airtel and 4,310 bln for Jio.

It added nearly 10,000 broadband sites during the quarter. Over the period of last two years, lode has added 96,020 broadband (3G+4G) sites, taking its total to 143,565.

VODAFONE MERGER

The cellular operator, due to be merged with Vodafone, said it has expanded its 2G sharing agreement with Vodafone and introduced 4G network sharing via roaming.

“This has resulted in expanded coverage across over 12,500 new towns and neighbouring villages, where one of the operators was not previously present,” it said.

Idea said it remains on course to introduce its own VoLTE – “Voice over LTE from March 2018 onwards in main markets.

The capex spend for the current quarter was Rs 1,750 cr, while net debt at the end of the quarter was at Rs 55,782 cr.

On the merger, it said both companies have set up respective project management teams, preparing for the merger and initiated detailed planning for identified capex and opex synergies.

After the merger, 6,300 co-located base stations will be merged in two years without the payment of exit penalty, it added.

Idea said it is in the process of raising up to Rs. 67.5 billion equity to strengthen combined entity’s balance sheet.

“The proposed capital raising of up to Rs. 67.5 billion will reduce Idea’s net-debt and as a result Vodafone net-debt contribution to the merged entity will also be reduced by a commensurate amount,” it said.

“This along with the recent sale of standalone tower businesses of Idea and Vodafone India for Rs. 78.5 billion and potential monetization of Idea’s 11.15% stake in Indus towers, will augment the long term capital resources of the combined entity.”

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