Idea Cellular seems to be riding high on Indian telecom growth story as it has reported a 52 per cent rise in the consolidated net profit to Rs 220.1 crore against Rs 144 crore in corresponding quarter. The revenues have also seen a similar surge by 29% at Rs 2973.9 crore against Rs. 2303.3 crores reported last year.
The number might look impressive on Y-o-Y basis but are lackluster if compared on a sequential basis as revenues has been flat and profits down severely. The company has also witnessed erosion in operating margins as it is down by 140 basis points at 25.3 per cent.
Mr Aga, Idea MD has also hinted at pricing pressures in short term and emphasized the fact that around 20% of all Indian subscribers are using multiple SIMs causing Telcos to realign their tariffs.
Subscriber Count & Other Stats:
The company’s subscriber tally stands at 51 million with a rise of 50% Y-o-Y. The company along with its subsidiaries operates commercially in 18 circles but holds license in all 22 circles. The company will launch its services in West Bengal and north eastern states later in Q3.
The ARPU’s has also seen a decline from Rs. 232 sequentially to Rs.209 in September Quarter. The average minutes of usages per user stands at 375 mins per month.
Average realization rate is also down to 0.56 (calculated by dividing ARPU’s to MOU). VAS as a percentage of revenues has inched higher at 10.6% compared to 9.8% in corresponding quarter.
Spice Telecom:
Idea has got regulatory approval to merge Spice Telecom with itself. Spice has a subscriber count of 0.5 million. The ARPU for Spice Telecom is at Rs.226.The average realizable rate hangs at 0.53 for Spice.
Idea Cellular has been garnering good growth in telecom subscriber count but is facing pressure from decline in average realizable rates and ARPU’s. The future may be bleak for mid-Telcos as the competition heats up and Indian telecom sector witness the lowest telecom tariffs in the world.
