India’s third largest mobile operator Idea Cellular posted a sharp drop in earnings for its fiscal H1 as financing costs more than tripled year-on-year.
The operator’s standalone net profit for its fiscal H1, ending 30 September, plunged 65.5 per cent to INR5.01 billion ($74.7 million), with revenue rising 7.6 per cent to INR188 billion. Its fiscal Q2 profit fell to just INR43 million from INR4.97 billion in FYQ1. Its H1 EBITDA was up 2.5 per cent to INR30.7 billion.
Interest and financing costs rose to INR18 billion during the period, while depreciation and amortisation expenses increased 36 per cent to INR38.7 billion.
A financial analyst told the Economic Times that the sharp profit drop in the September quarter was not so much triggered by Jio’s recent launch but primarily driven by seasonality.
The company spent nearly INR128 billion to expand its 4G spectrum holdings in the last auction. It aims to offer countrywide 3G/4G coverage by next March and has earmarked INR10 billion on equipment capex in FY17.
“4G services will be expanded to 20 service areas from 11 now, and 3G services to 15 from the present 13,” Idea said in a statement.
Over the past two years, Idea said it expanded its network sites by 63 per cent, adding 83,276 base stations, including nearly a 3.5-times increase in 3G/4G sites to 85,412. Its wireless broadband population coverage reaches 430 million people in 17 service areas, it said.
It said nine million customers upgraded their 2G phones to 3G/4G smartphones in the last quarter, taking the overall smartphone count to 70.4 million. Blended mobile data ARPU fell to INR130 from INR144 in Q2FY16, but data usage per subscriber increased to 694MB from 615MB in Q2FY16. Mobile data revenue accounts for 22 per cent of service revenue.