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Q4-09: Idea Cellular Profit Down 6.42% YoY; Subs, Churn Up; ARPU, RPM Decline


(By Nikhil Pahwa & Preethi J)

Idea Cellular has reported standalone revenues for Q4 of Rs. 28,626 million, up 9.22% quarter on quarter, and at Rs. 3.032 billion, a sequential increase in net profit of 18.35%. However, for the full year ended March 31st 2009, net profit was down 6.42% at Rs. 10.423 billion.

Total minutes on the network grew 9.9% on a quarter on quarter basis, and average rate per minute declined from Rs. 0.64 per minute to Rs. 0.63 per minute. 

Idea Cellular added 4.7 million subscribers in the quarter, its highest ever. Its subscriber base grew by 79.2 % during the fiscal, leading to a 47.9% growth in standalone revenues.  The company has said it plans to roll out in Tamil Nadu in the June 2009 quarter.

Details: Release | Financials | Quarterly Report


Key Performance Indicators

The last quarter was something of an aberration for Idea cellular, wherein the company reported an increase in ARPU despite an increase in subscriber base. The trend, prior to this, has been a decline in the companys ARPU with subscriber base growth, and that trend has resumed since net additions tend to be at the lower end of the ARPU range.


Idea subscribers are talking less – the average minutes of use declined for the company. Added to this, the average revenue per minute also continues to decline. In the last quarter, both pre-paid and post-paid churn increased for Idea Cellular.

In its 8 established service areas, the company claims to have gained marketshare by 1% market share, and increasing its marketshare in the 3 gestating service areas to 6.3%, from 5.8% a year ago.

Idea also claims to have acquired a 4.0 % share of Bihar and Mumbai combined, with net-additions market share of 16.6%, during last 6 months.


Value Added Services

Unlike in the previous quartes, Idea Cellular has not disclosed the percentage of revenue from Value Added Services. We’ll update in case they are mentioned in the earnings conference call.


Consolidated Results

For the quarter ended March 31st 2009, the company recorded a net profit of Rs. 2.74 billion, up 25% quarter on quarter, on a consolidated basis – this includes income proportionate to Idea’s holding in Spice Communications and Indus Towers. Year on year basis, profit declined 14% to Rs. 9.009 billion. Revenues grew 7% for the quarter, and on an annual basis, to Rs. 101.484 billion.

Key Corporate Developments

June ’08 – Providence Equity Partners invested $640 Mn in Aditya Birla Telecom
Aug ’08 – Idea Cellular and TMI acquired Spice Communications
Sep ’08 – Rolled out in Bihar and Jharkhand
Dec ’08 – Entered the PCO space, launched its first GSM PCO at Chandigarh. Announced plans to launch 5500 GSM integrated coin collection boxes by March 2009 in Punjab. Anounced plans to set up 27,000 retail outlets and launch a 1,200 Direct Sales team. Received spectrum for Kolkata.
Jan ’09 – Idea entered Punjab and Karnataka circles through Spice
Feb ’09 – Launched wireless broadband Plug & Play ‘NetSetter’ in Karnataka
Apr ’09Rolled out in Orissa. Received spectrum for Assam, Northeast, Jammu & Kashmir and West Bengal.

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