Idea Cellular has posted a 3 percent drop in profit before tax in the mobility segment from Rs 2992.8 million last quarter to Rs 2901.6 million in Q3. The operator has seen a 19 percent rise in revenues to Rs 27364.3 million from Rs 22922 million last quarter.The company has been allocated spectrum in Kolkata, Assam, North-East and Jammu & Kashmir circles in December 2008 and for West Bengal in January 2009.

Spice Deal

Idea Cellular’s stake in Spice has risen to 41.09 percent with the successful acquisition of 20 percent equity stake from public shareholders and purchase of 281,489,350 equity shares held by MCorp, which represented 40.8 percent of the total paid up equity capital of Spice. The operator plans to merge with Spice and is holding back roll outs of its network in Punjab and Karnataka where Spice was operating. Idea has licenses for these two circles and is carrying them at cost with plans to demerge them and begin a separate independent entity.

Idea has also paid a non-compete fee of Rs. 5439.8 million to MCorp in July 2008 as a part of the acquisition which will last for three years. It has filed a request with the stock exchange to adjust the fees against the balance in the Securities Premium Account and amortisation of the non-compete fee amounting to Rs. 459.6 million for the current quarter was not performed.

As a fund raising move, Aditya Birla Telecom Ltd (ABTL) has issued 19,25,000 Compulsory Convertible Preference Shares of the face value Rs. 10 each for a total consideration of Rs. 20982.5 million to P5 Asia Holding Investments (Mauritius) Limited during the quarter. Out of the proceeds received from Preferential Issue to TMI Mauritius Limited during August 2008, Rs. 28418.3 million has been utilised during the current quarter. The unutilized balance of Rs. 265176 million as on 31st December 2008 is lying in deposits with banks and mutual funds.

Performance Indicators & VAS

Idea: Bucking the trend, Idea has shown an increase in ARPU – up to Rs. 266 from 261 last quarter, though minutes of use have declined from 417 per user to 410. 94.3% of Idea’s subscribers are pre-paid, and Idea gets 17.6% of the net additions to the mobile market, in the 13 service areas where they are operational. The company has a blended churn of 4.3%, with a prepaid churn of 4.4%.

q309 idea cellular vas

VAS constitutes 9.5% of ARPU for Idea, though it has increased in absolute terms – from Rs. 25.57 to Rs. 26.50.

Spice Communications: with a presence in Punjab and Karnataka, Spice has a subscriber base of 3802000, of which 85.7% are prepaid. Interestingly, since June 2008, Spice’s subscriber base has actually declined significantly by 16.4% – around 746,000 subscribers have left the telecom operator. The company has a rather high blended churn of 6.2%, of which Prepaid has a churn of 6.3%.

Q309 Spice Communications VAS

Spice’s ARPU is higher than that of Idea, at Rs. 279, and VAS accounts for 10.9% of their revenue.

Q3-09 Details: Financials, Quarterly Reports, Release