Idea’s loss widens to Rs 1,352 crore in Q3

The firm’s Ebitda declined 18.5% q-o-q to Rs 1,223 crore, while the Ebitda margins came in lower by 130 bps

By: ENS Economic Bureau | Mumbai/ New Delhi | Published: January 25, 2018 1:51:43 am
Idea Cellular, Bharti Airtel, mobile termination rates, Idea Vodafone deal. reliance jio, Indian express The company, which is in the process of being merged with Vodafone India to be able to face competitive pressures better,

Idea Cellular on Wednesday joined Bharti Airtel to get hit on all key financial metrics during the October-December quarter, impacted by the 57 per cent reduction in mobile termination rates as well as competitive pressures brought in by Reliance Jio. The company, which is in the process of being merged with Vodafone India to be able to face competitive pressures better, reported a wider net loss at Rs 1,352 crore compared with Rs 1,176 crore in the preceding quarter and a 13 per cent sequential fall in revenues at Rs 6,510 crore.

The October-December quarter rang in two key changes in the country’s telecom sector. First, Jio posted higher profits at Rs 504 crore than Bharti Airtel’s Rs 306 crore. Second, during this period Jio raced ahead of Idea with revenues of Rs 6,879 crore.

Similar to Bharti, Idea said that its revenues and Ebitda were adversely impacted by the reduction in the mobile termination rates which came into effect from October 1, 2017. Idea said that its revenues took a hit of Rs 820 crore and Ebitda of Rs 230 crore. Consequently, Idea’s Ebitda declined 18.5 per cent q-o-q to Rs 1,223 crore, while the Ebitda margins came in lower by 130 basis points at nearly 19 per cent.

Bharti’s revenues due to reduction in termination rates were hit by Rs 1,062 crore and Ebitda by Rs 338 crore. Further, the cut in international mobile termination effective February 1, from 53 paise to 30 paise per minute, will once again hit all operators, but since Jio’s revenues from international calls is lower than Bharti’s, Idea’s and Vodafone’s, it will be less affected than incumbents. Himanshu Kapania, MD, Idea Cellular, told analysts on a conference call that the impact of cut in IMT on firm’s Q4FY18 revenues and Ebitda for the two months of February and March 2018 is estimated to be about Rs 65 crore and Rs 40 crore, respectively. FE

For all the latest Business News, download Indian Express App

Advertisement
Advertisement
Advertisement
Advertisement