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Thursday, July 27, 2017

2017-18 April -June First Quarter Results - Idea reports ₹815-crore loss in Q1

The Aditya Birla group’s Idea Cellular Ltd, the country’s third largest telecom network provider by number of subscribers, reported its third straight quarter of losses for the April-June 2017 period. It made a consolidated net loss of ₹815 crore for the first quarter this year, compared to a profit of ₹220 crore in the same period last year.

On a standalone basis, operating revenue fell nearly 40 per cent year-on-year to ₹1,875 crore while operating margins fell from 32.6 per cent to 23 per cent in the intervening 12 months. Idea’s revenue have been ravaged by the entry of Mukesh Ambani’s Reliance Jio from last September, with the new entrant offering extended periods of nearly free data and voice services.

Idea responded with aggressive tariff offerings, the company said, “led by unlimited voice and data bundled plans, resulted in steep decline of voice and mobile data realisation rates. 

However, for the company, the fall in realisation rates was largely compensated by a substantial volume growth in both mobile voice and data segments.” Mobile data rate saw an unprecedented decline of 52.9 per cent, reaching to as low as 5.4 paisa/MB (vs. 11.5 paisa in Q4 FY17). 

The net debt as on June 30, 2017 stood at ₹53,920 crore, including a large component of debt from Department of Telecom under ‘Deferred Payment Obligation’ for spectrum acquired in auctions. Idea and Vodafone India are currently in the process of merging their services to battle RJio’s might and cash reserves; the merger proposal recently received the approval of the fair trade regulator and is awaiting the approvals of securities market regulator and the stock exchanges.

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