India’s third largest mobile operator Idea Cellular reported strong profit and revenue growth for its fiscal year ending 31 March, benefiting from brisk demand for data and stabilising voice income.
Its net profit expanded 62 per cent to INR31.9 billion ($499 million), while revenue increased 19 per cent to INR315 billion. The results include a 16 per cent contribution from its tower joint venture Indus.
The company said the Telecom Regulatory Authority of India’s reduction in termination rates, effective on 1 March, cut revenue by more than INR1 billion, but didn’t have a material impact on EBITDA. Its EBITDA margin rose 2.9 points to 34.2 per cent.
Voice revenue continued to be under pressure for the third straight quarter. But a 16.3 per cent increase in voice minutes helped compensate for a 7 per cent drop in voice tariffs.
Rapid growth in data revenue offset the modest decline in voice and now non-voice revenue accounts for almost a quarter of service revenue, a sharp increase from 16.5 per cent a year ago. Data ARPU was up 44 per cent to INR150. Overall ARPU increased 3.5 per cent to INR179 in Q4.
Idea had 23.5 million net additions last year, for a total of 161.4 million subscribers and a 16 per cent share of the Indian market. Mobile data users (2G/3G) expanded to 33.4 million and now represent over a fifth of its subscriber base. It also doubled its 3G customer base to 14.5 million.
Overall expenses increased 15.1 per cent to INR264 billion, with subscriber acquisition, servicing and marketing expenses rising 17.3 per cent to INR29.96 billion. Roaming and access charges were up 13.7 per cent to INR47.3 billion.
The company’s capex increased to INR40.5 billion to support the expanding data usage, which jumped 2.3 times in fiscal 2015 to 30.7 billion megabytes. It added about 16,500 base stations, more than half of which were 3G sites. It now has more than 142,000 sites across India.
Its capex guidance for fiscal 2016 is INR50-55 billion, excluding any spectrum related payments.
In last month’s spectrum auction Idea was the biggest spender – paying about INR303 billion for 79.4MHz, with renewals making up the majority of its spending.