Idea Cellular, third largest telecom operator of the country announced its financial results for the quarter ended December 2015 on January 21.
Revenue growth: The company reported a marginal decrease in net profit at Rs. 764 crore for the third quarter that ended on December 31, 2015 as compared to IIFL estimates of 5.2% decline Y-o-Y to Rs. 767.1 crore.
The company had reported a net profit of Rs.767 crore for the corresponding quarter last year, it said in a filing to the BSE.
The company's total income has increased by 10.9% at Rs. 9,040.5 crore for the quarter against Rs. 8,150.1 crore in the corresponding quarter of the previous year.
Pricing pressure: CEO Himanshu Kanapia said “The company is experiencing pricing pressure in both voice and data services. For voice, it is because of IUC charges and lowering cap of roaming, SMS charges and impact of taxes. However, the company will bottom down voice prices.” Talking on 3G data, he said that there is pressure on data prices because of punching of supply increase. There is aggressive competition to cater to expand 3G and 4G services. Many first time customers have been added who need trial plans which has pressurized data pricing. The fall in prices and hence the pressure is likely to continue however not at the existing intensity.
Declining PAT: Profit after Tax (PAT) has been on a decline for three consecutive quarters. However it will further decline till Q1 FY17, the company informed in earnings press conference. The company said that amortization of spectrum is one of the main causes behind declining PAT.
Capex guidance: The company has revised its Capex guidance from Rs. 6500 crore to Rs. 7500 crore. The reason for increase in Capex being infrastructure and other investments with regards to launch of 4G services.
Data subscribers: The company had 28 million of 3G and 4G data subscribers prior to December quarter. They added more 28 million subscribers in Q3 and the count went up to 55 million subscribers at the end of December 2015, almost doubling in a single quarter. However the company said that only 38% of the total subscribers are currently active and the percentage will increase as they improve further on data services.
Future focus: The company plans to focus on expanding and improving services and monetizing current assets. The telco also plans to focus on voice realization.
Payment bank: The company has been working towards creating a payment bank and will launch it in the second half of CY16.
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