Idea posts profit despite continued slide in revenue - Mobile World Live

Idea posts profit despite continued slide in revenue

31 JUL 2018

A one-off gain put Idea Cellular, the third largest mobile operator in India, back in the black for its fiscal Q1 ending 30 June, but intense price competition led to continued declines in ARPU and revenue.

The operator’s net income for the quarter hit INR2.57 billion ($374 million) due to a profit of INR33.6 billion from the sale of its standalone tower assets in May 2017, reversing a net loss of INR8.15 billion a year ago. Consolidated revenue fell 28 per cent year-on-year to INR58.9 billion.

In a statement, the operator said the mobile industry continued to decline under pressure from heavily discounted unlimited voice and data plans and subsidised 4G feature phone offerings “from one of the operators [Reliance Jio], forcing commensurate response from existing mobile operators to retain subscribers”. The sector offers unlimited data and voice bundles at unsustainable, below cost price levels impacting the financials of all incumbent operators, it said.

Blended ARPU dropped to INR100 at end-June from INR141 in June 2017.

Despite strong competition, its mobile subscriber base remained fairly steady at 188 million over the past year. Mobile data usage per subscriber per month jumped sharply to 8GB in the April-June quarter, compared with 3GB per month a year ago.

The operator added 5,688 3G and 4G sites during the quarter, increasing the total to more than 160,000 broadband sites at end-June and giving it nearly 55 per cent population coverage.

Consolidation nearly complete
Idea and number two Vodafone India this month received final approval from the Department of Telecommunications to merge (creating the country’s largest player), with the transaction expected to close shortly, Idea said.

While near-term challenges persist, Idea noted in a statement, the long-term opportunities in the mobile sector continue to remain attractive: “with the exit of subscale operators, consolidation of industry structure is nearly complete. Once the current phase of below cost tariffs is over, it is inevitable industry ARPU will revive. Additionally, the low rural penetration, improving adoption of data users and SIM consolidation augur well for long-term prospects of existing large mobile operators.”

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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