ideaIdea Cellular‘s mobile data customer base declined to 25.5 million for the quarter ended 31st December 2013 (Q3-FY14) from 33.6 million at the end of Q2-FY14, on account of removal of “incidental data users’ being removed. While it’s not clear what the company means by ‘incidental data users’, perhaps referring to those who merely click on WAP links they receive via SMS, and aren’t daily active users of mobile Internet services. We’ll update this with a clarification from Idea Cellular’s conference call.

What culling of this base has done, is that it has helped Idea Cellular bump up its mobile data ARPU (for data subscribers), and mobile data usage: mobile data ARPU has improved to Rs. 91 in from Rs. 52, while the blended mobile data usage per user grew to 309 MB from 178 MB in the previous quarter. The 3G user mobile data ARPU is steady at Rs 112 per month. But there was an increase in absolute terms as well: Idea Cellular served 20.8 bn MB of data in, up from 7.5 billion MB in Q2-FY14. “However, with a grim battle for data supremacy,” the company added, “the ‘Average Realised Rate per MB’ (ARMB) fell sharply by 1.3 paisa to Rs 0.296/MB from Rs 0.31/MB.

The company added 4.6 million new 3G users during 2013 with 3G EoP user base (Voice and/ Data) now at 8.7 million. Last quarter, Idea Cellular had warned that that its “non-data mobile VAS revenues” are under pressure from the “threat emerging from free messenger & chat ‘OTT’ applications/services”, as well as the institution of TRAI’s double confirmation regime, which is impacting all telecom companies. Non-Data VAS as a percentage of revenues has declined to 6.6% of service revenues last quarter. It was 7.4% last quarter, and 8.9% for the same quarter last year.

In contrast, Data as a percentage of service revenue has increased by 3.8% to 9.5% in last one year. ‘Value Added Services’ (VAS) (including Data and Non-Data VAS) are 16.1% of ‘Service Revenue’, up from 14.6% in Q3-FY13.

Mobile Internet Data

– Data revenues are 9.5% of Service Revenue, up from 8.7% of service revenue last quarter, and 5.7% in Q3-FY13.
– 8.096 million connections reduced on a quarterly basis. 3.768 million added on a yearly basis.
– 25.522 million, down QoQ from 33.618 million 2G+3G users
– Data ARPU per data customer (2G + 3G): Rs 91, up from Rs 55 last quarter, and Rs 52 for the same quarter last year
– 309 MB blended per user data usage, up from 178 MB last quarter and 167 mb last year.
– 20.840 billion MB data transferred. Up from 17.5 billion MB data transfer last quarter, and 167 MB from Q3-FY13.
– Rs 0.296 per MB is the Average Realized Rate per MB, down from Rs 0.31 per MB last quarter.

– 3G data connections: 8.7 million, up from 6.2 million last quarter
– 3G Data ARPU per data customer: Rs 112m down from Rs 116 last quarter
– 3G Data Usage: 429 mb per connection, up from 398 mb last quarter
– 3G Data volume: 9.469 billion MB, up from 7.5 billion MB
– 3G cell sites: 18,297 sites added, up from 18,031 last quarter.

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Operational Parameters

– Connection base grew to 128.7 million (2G+3G), up from 127.2 million in the previous quarter.
– Average Realised Rate per Minute (ARPM) improved to Rs 0.449 from Rs 0.447
– ARPU increased to Rs 169 from Rs 164 for the same quarter last year
– Average minutes of use declined to 376 per connection, up from 368 last quarter, but lower than the previous two sequential quarters of 398 minutes per connection, and 406 minutes.
– Prepaid subscribers: 95.7% of total subscriber base, down from 95.8% the previous quarter.
– Churn: 5.6% blended churn, up from 5.3%. Prepaid churn was up at 5.8%, from 5.4% the previous quarter; postpaid churn was 3%, up from 2.8%
– Minutes of Use: The total number of minutes on network increased to 144,571 billion, up from 138.827 billion.
– Idea’s Active Connection base went up by 14.8 million, up significantly from 7.8 million last quarter. It claims to have added 18 million incremental active connections in the calendar year 2013.
– MNP: Idea claims a net gain of 8.4 million connections so far, via MNP (i.e. porting in minus porting out, until December 31st, 2013)

Financials

Idea’s Q3-FY14 standalone revenue grew by 17.8% to Rs 6610.5 crore from Rs 5613.5 crore, on back of 9.4% annual growth in ‘Total Minutes of Use’ and 107.6% in data volume. It claims a revenue market share of 15.8% in Q2-FY14, an improvement of over 1% in last one year. The company says its EBITDA grew by 37.7% year on year, and EBITDA margin increased by 4.0% to 27.4%, mainly on the strength of improved rate realisation (ARPM), cost optimisation and scale benefits.

Profit After Tax increased to Rs 398.1 crore from Rs 191.1 crore in Q3FY14. The Cash Profit for the company remained healthy at Rs 1566.3 crore, a growth of 41.3% over Q3-FY13, and Net Debt reduced by Rs 2736.4 crore during 2013 to Rs 8945.8 crore.