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Idea net profit falls to Rs 764.2 crore as voice and data margins squeeze

Idea umbrella

Idea Cellular has reported 41.35 million mobile data subscriptions for the quarter ended December 31, 2015 (Q3 FY16). In the preceding quarter, the telco had 41.3 million data subscribers showing a flat growth of 0.4% sequentially.

The company registered a blended mobile data ARPU (average revenue per user) of Rs 145, a drop of 1.36% from Rs 147 in the same quarter last year. On a quarter-on-quarter basis, mobile data ARPU showed flat growth of 0.69% from Rs 144.

Note that Idea Cellular had changed its mobile data subscriber definition in Q4 FY15, and has eliminated from its reporting incidental data users of less than 10 Mb/month. Idea Cellular had started culling incidental data users from Q3-FY14 and it had previously defined it as users who have consumed less than 1 MB/month.

The total 3G subscription base stood at 21.20 million at the end of Q3 FY16 growing at 27.24% from 16.66 million subscribers from the same period last year. The telco’s 3G subscription base was at 19.58 million in the preceding quarter, an addition of 1.61 million customers.

Idea’s net profit after tax was Rs 764.2 crore in the third quarter, compared with Rs 767.1 crore in the same period a year earlier, a fall of 0.37%. On a sequential basis, net profit was down 5.27% from Rs 809.3 crore. To give some context, Idea’s net profit was up 27.83% in Q1 FY16 and up 60% Q4FY15.

Idea attributed the fall in net profit to reduced voice minutes of use (down 3.2% y-o-y to 189 billion minutes), lower interconnect charges, reduction in national roaming call charges & SMS rate and increased pressure on data margins.

Data as a percentage revenue stood at 20.2% at the end of Q3, up from 19.6% from the preceding quarter. Data as a percentage revenue stood at 17.7% in the same quarter last year.

3G Mobile Internet connections

The data on 3G Internet for Idea Cellular at the end of Q3 FY16:

– 3G Internet connections: 21.20 million, up from 19.59 million in the previous quarter.
– 3G Internet ARPU per Internet customer: Rs 196, down from Rs 202 last quarter
– 3G Internet Usage: 866 MB per connection, up from 802 MB last quarter
– 3G Internet volume: 53.6 billion MB, up from 43.05 billion MB in the previous quarter.
– 3G Sites: 47,545, up from 39,867 sites in the previous quarter.
– 3G phone penetration: Over 32.9% of Idea users own high speed 3G devices. Note this also includes customers who own 4G phones.

Mobile Internet 

Mobile Internet volume grew significantly to 80.99 billion MB, up 14.89% from 62.68 billion MB in the previous quarter.

– The average realization per MB decreased to 22.3 paisa per MB for the quarter, from 23.4 MB in the previous quarter.

Blended Internet ARPU (2G + 3G+4G) fell to Rs 145, from Rs 144 in the previous quarter and grew from Rs 147 in the same quarter last year.

Blended usage per Internet subscription grew to 653 MB for the quarter, up from 615 MB in the previous quarter and 599 MB in the same quarter last year.

Other services in 2016

Payments bank: Idea said that it would start consumer services by the second half of calendar year 2016. RBI has given in principle approval to set-up the Payments Bank to Aditya Birla Nuvo Limited (ABNL) as promoter.  ABNL (51%) jointly with Idea (49%) is planning to setup payment bank.

Download: Press release | Quarterly presentation | Financials 

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