Idea Cellular Tanks Over 8% On Reporting Second Straight Quarter Of Loss

Idea Cellular’s net sales fell 14.3% on year to about Rs8,110 crore in the December quarter

Idea Cellular’s net sales fell 14.3% on year to about Rs8,110 crore in the December quarter

Airtel posted a consolidated net profit of Rs 373 crore in fourth quarter ended March 31, 2017, lower by 71.7% in the corresponding period of the previous year while Idea recorded a net loss of Rs 327.9 crore in three months to March 31 as against Rs 451.9 crore profit in the same period last year. By adding Mumbai to its 4G footprint, the company will be offering broadband services - 3G and / or 4G - on its own spectrum across all 22 service areas. It has started charging since April 2017.

Analysts had, on average, expected the wireless carrier to post a loss of Rs 714 crore, according to Thomson Reuters data. The EBITDA margin was reported at 27 percent.

Idea Cellular beat estimates in the fiscal fourth quarter while posting its second net loss in succession, with both voice and data services hurt by a brutal price war triggered by the entry of Reliance Jio, a development which has also forced India's No. 3 telco to announce a merger with rival Vodafone India. The October to April 2017 interval can be best described as "Period of Telecom Discontinuity", permanently changing mobility business parameters.

For the quarter ended March 31, Idea's earnings were also hurt by finance cost which rose 15.5% on year.

"For the first time in its history, the flourishing Indian Mobility industry, is trending towards an annual revenue decline of ~2% in FY17 (vs FY16)". Income for the year declined slightly to Rs 35,882 crore, from 36,162 crore in 2015-16.

The contribution of the non-voice revenue, including data, to the overall service revenue fell to 24.9 per cent as mobile data revenue contribution declined to 18.3 per cent.

"The Indian wireless industry witnessed an unprecedented disruption in the second half (October-March) of the fiscal under review (FY 2017) due to free voice and mobile data promotions by the new entrant (Reliance Jio)", said the company in a statement later.

Competitively, Idea continued to strengthen its market share position with its Revenue Market Share (RMS) expanding to 19.0% in calendar year 2016 (CY16), an increase of 0.4% compared to CY15.

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