Idea Cellular, India’s third largest mobile operator, laboured in its fiscal Q2 (ending 30 September), reporting a loss of INR11.76 billion ($180 million) as consolidated revenue slid nearly 20 per cent to INR74.65 billion from a year ago.
The swing to a loss follows a net profit of INR43 million in fiscal Q2 2016.
Service revenue in fiscal Q2 this year dropped 19.7 per cent to INR74.6 billion as the operator was forced to reduce tariffs in response to rival Reliance Jio’s generous voice and data offers after it entered the market in September 2016. The sale of goods fell during the period to INR14 million from INR86 million a year ago.
Blended ARPU fell nearly 24 per cent year-on-year to end September at INR132. The company said data revenue represented just 16.5 per cent of total service revenue in the quarter, down from 21.9 per cent a year ago.
The operator, which agreed in March to merge with Vodafone India to create the country’s largest mobile player, said in a statement: “The operating environment for Indian mobile operators remained challenging with unrelenting pressure on pricing, the introduction of GST @18% (compared to service tax @15%) and the need for large investments to support the exploding data demand.”
Idea, with a 16.5 per cent market share, said the introduction of unlimited voice and bundled data price plans has changed the consumption habits of Indian mobility users. “As Indian customers graduate to higher ticket unlimited/bundled plans, the mobile service consumption trends are shifting from ‘snacking’ to ‘buffet’ with marked higher per subscriber usage.”
It added 3.6 million mobile subscribers since Q3 2016, taking its total sub base to 182.4 million. 3G and 4G subscribers increased by 3.2 million to 29.6 million in the recent quarter.
The operator plans to spend more than INR60 billion on network capex in fiscal 2018, down from INR79 billion last fiscal year, to add up to 40,000 3G and 4G cell sites, expanding the total up to 150,000 sites. It said its wireless broadband network (3G and 4G) coverage reaches 47 per cent of the Indian population (4G covers 38 per cent of the population).
Market leader Bharti Airtel reported a sixth consecutive quarterly decline in profit during its fiscal Q2 ending 30 September, as the ongoing price war weighed on its key India market.