Idea posts Rs 1,107 cr loss on Jio price hit

Idea Cellular on Monday posted a loss of Rs 1,106.80 crore for the second quarter of the current financial year.

Idea, which is in the process of a merger with Vodafone India, had reported a net profit of Rs 91.5 crore in the July-September quarter of the last fiscal. Its revenue from operations fell 19.72% to Rs 7,465.5 crore.

The company said the seasonally weak quarter was marked by high competition, regulatory changes and consolidation in the industry; besides, the business has been hit by pricing pressure.

The telecom industry has come under pressure since the entry of Reliance Jio. Recently, country’s largest telecom player Bharti Airtel had posted a 76.5% fall in consolidated net profit to Rs 343 crore for the September quarter. Reliance Communications last week reported a consolidated loss of Rs 2,709 crore for the same period.

“The operating environment for Indian mobile operators remained challenging with unrelenting pressure on pricing, introduction of goods and services tax at 18% (compared to service tax at 15%) and need for large investments to support the exploding data demand,” Idea said.

Although seasonal industry slowdown is in sync with the past trends, the September quarter impact on the company’s subscribers and revenue loss was more pronounced given its higher share of rural subscribers, Idea said.

While its broadband data usage nearly doubled, the rate realisation continued its free fall during the the second quarter. The voice realisation rate fell by 9.9% over the June quarter and mobile data realisation fell more sharply by 49.2%.

IDEA Cellular Limited