Tariff war impact: Idea posts Rs 617-crore loss in Q1

The company’s net debt as on June 30, 2017, stood at Rs 53,920 crore, including a large component of debt from the department of telecommunications under the ‘deferred payment obligation’ for spectrum acquired.

By: ENS Economic Bureau | Mumbai | Updated: July 28, 2017 1:56 am
Idea Cellular, Idea loss, Idea Q1 profit, Idea shares,Reliance Jio, Bharti Airtel, Business news, Indian Express Idea Cellular on Thursday reported a standalone loss of Rs 617 crore for the three months to June, bigger than the Rs 430 crore in the January-March quarter. (File)

Idea Cellular on Thursday reported a standalone loss of Rs 617 crore for the three months to June, bigger than the Rs 430 crore in the January-March quarter bruised by the tariff war in the sector after Reliance Jio launched free data and voice services last September.

Realisations from data services crashed during the quarter and those from voice services also dropped, resulting in a sequential contraction in earnings before interest, tax, depreciation and amortisation (Ebitda) margins of 310 basis points to 23 per cent. However, reasonably good volume growth for both voice and data services helped stem the losses.

“The financial stress in the mobile sector remains at its peak, post the introduction of aggressive unlimited bundled plans by new entrant forcing other operators to follow. Resultantly, all ‘Telecom Service Providers’ are reporting steep decline in revenues, profitability and cash flows and all but one Indian wireless operator quarterly results are likely to show significant financial losses,” Idea said in a statement.

The company’s net debt as on June 30, 2017, stood at Rs 53,920 crore, including a large component of debt from the department of telecommunications under the ‘deferred payment obligation’ for spectrum acquired.

Supported by reasonably good increases in both voice and data volumes, which nearly doubled to 252.8 billion MB, Idea Cellular’s revenues in Q1FY18 inched up by 0.5 per cent to Rs 8,166.5 crore. Bharti’s revenues were flat quarter-on-quarter while operating profit fell 1.3 per cent sequentially. Mobile data realisations plummeted an unprecedented 53 per cent, hitting 5.4 paise per MB. The average realisation per minute for voice also fell by 6 per cent to 24.4 paise a minute, but traffic was up a good 8.4 per cent to 250.7 billion minutes.

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