NEW DELHI – Telecom operator Idea Cellular on Saturday logged a consolidated net loss of Rs 383.87 crore for the December 2016 quarter compared to a net profit of Rs 659.35 crore in the year-ago period, hurt by newcomer Reliance Jio’s free voice and data promotions.
Total income also has decreased to Rs 8,706.36 crore for the quarter, from Rs 9,032.43 crore in the same period in the previous year, as per a BSE filing.
“The Indian mobile industry witnessed an unprecedented disruption in the quarter of October to December 2016, primarily due to free voice and mobile data promotions by the new entrant in the sector,” Idea Cellular said in a statement.
Consequently, revenue KPIs (key performance indicators) and financial parameters for all mobile operators have sharply declined, and for the first time in its history, the flourishing Indian wireless sector is trending towards an annual revenue decline of 3-5% in 2016-17 (vs 2015-16), it added.
“The sector can expect to recover revenues only once the new operator starts charging for its pan-India mobile services. As a result of this current industry upheaval, the standalone Idea revenue dropped to an unforeseen level at Rs 8,662.7 crore, a decline of 6.9% on sequential quarterly basis,” it said.
Idea, which is in talks with rival Vodafone for a merger, said it was “forced to reduce” its voice rates on sequential quarterly basis by 10.6% to 29.6 paise per minute (versus 33.1 paise in the second quarter of 2016-17) and drop in mobile data rates by 15.2% q-o-q to 15.9 paise per megabyte (vs 18.7 paise).
“Despite an unprecedented outgoing voice rate fall, the lure of free offerings resulted in lower than normal volume elasticity with the quarterly sequential voice minutes growing only by 7.3% to 210 billion minutes (vs 195.5 billion minutes in second quarter of 2016-17), that too led by double digit growth in incoming call volume,” Idea said.
Also, the higher blended voice realisation rate fall was also an outcome of the “tsunami of minutes” terminating on Idea’s network from the new operator, resulting in overall higher ratio of subsidised incoming minutes recovered at below cost IUC settlement rates.
