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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