India’s third largest operator Idea Cellular reported a sharp increase in data and voice usage in its Q3 ending 31 December, but downwards pressure on tariffs caused by increased competition and regulatory changes slowed revenue and profit growth.

Mobile data usage jumped 75.8 per cent to 81 billion megabytes during the quarter and voice minutes expanded 16.7 per cent to 199.2 billion minutes. But declines in data and voice rates (down 17.2 per cent and 10.6 per cent respectively) slowed the operator’s revenue growth from the previous year, the company said.

The operator attributed the decline in tariffs to “intense pressure on mobile data rates, as wireless broadband demand growth is slower than the increased supply from operators launching/expanding their 3G/4G footprints”. In addition, it said the regulator last March reduced the termination charge for incoming calls by 30 per cent and lowered the cap for national roaming calls and texts on 1 May.

While consolidated Q3 revenue increased 12.3 per cent to INR90.1 billion ($1.35 billion), its net profit dipped slightly to INR7.64 billion from INR7.67 billion a year ago. Consolidated EBITDA increased 13.6 per cent to INR31.28 billion, as its EBITDA margin rose 0.4 points to 34.7 per cent.

Last year the operator added 29.7 million subscribers, taking its total customer base to 182 million. It had a 19.1 per cent share of the country’s mobile connections, according to TRAI. Its net mobile data customer base, however, remained flat at 41.4 million (41.3 million in fiscal Q2) during the quarter as the company said it tightened its data subscriber reporting.

Higher mobile data usage per customer helped improve blended mobile data ARPU to INR145 ($2.17) in fiscal Q3. Non-voice revenue contributed 28 per cent of total turnover during the quarter, up from 23 per cent a year earlier.

Idea said the INR23.1 billion it spent on capex was financed by a cash profit of INR23.5 billion for the quarter. It rolled out almost 11,000 base stations in the quarter, including nearly 7,700 3G/4G sites, taking its nationwide total to 170,000 (47,500 3G/4G).

4G
The operator said it has rolled out 4G service in 183 towns in seven service areas and aims to expand the 4G footprint to three remaining regions, where it has 4G spectrum, by March and cover more than 750 towns by June.

Its 900MHz spectrum in seven regions, which expired in December, was replaced in five service areas with the 900MHz ‘liberalised’ spectrum it won in the March auction. It will have access to 900MHz spectrum in the other two regions in April.

Idea signed an agreement with Videocon Telecommunications last November to purchase 1.8GHz spectrum in two service areas.