Idea Q3 revenue falls 25% from MTR cut “body blow”

India’s Idea Cellular has reported a steep 24.9% decline in Q3 revenue and a surge in net losses as a result of the “body blow” from regulator Trai in the form of a mobile termination charge cut.

Revenue for the quarter fell to 65.1 billion rupees ($1.02 billion), and the operator’s standalone net loss climbed 182.3% to 13.52 billion from 4.78 billion a year earlier.

The decision by regulator Trai to reduce mobile termination rates from 0.14 rupees to 0.06 rupees per minute resulted in a steep 57% decline in interconnection usage charge rates, which Idea said negatively impacted revenue for the quarter by 8.2 billion rupees.

“The new domestic MTC rate and recently announced drop in ‘International mobile termination’ settlement charges effective 1st February, 2018 from 53 paisa (0.53 rupees) to 30 paisa per minute, remains a body blow to all operators and reduces investable funds for the critical ‘Digital India’ program,” Idea said in its quarterly report.

“The international IUC rate drop only benefits the foreign operators, with no commensurate benefit to Indian consumers but with significant foreign exchange and revenue loss to the Indian exchequer.”

Idea also blamed ongoing “unrelenting rate pressure on voice and mobile data services as high ARPU consumers migrate to unlimited voice bundled data plans.”

SEE ALSO:   China Unicom, Kuang-Chi sign cooperation agreements

Despite its financial woes, Idea said that the company had managed to accrue 7.5 million net customer additions for the quarter due in part to a large influx of subscribers porting to the company from operators exiting the market in India’s wave of consolidation.

This took Idea’s total customer base past the 200 million milestone for the first time to 203 million.

The adoption of unlimited voice bundled data plans also led to an explosion in voice volumes for the quarter, with voice minutes of use growing 10.8% sequentially. Data usage per data subscriber also surged to 4.74GB per month during the quarter, from just 703MB a year earlier.

Idea said it is in the final stages of the approval process for its planned merger with Vodafone India, which is expected to close in the first half of the year. The proposed $23 billion merger would create India’s largest operator by subscribers with around 400 million customers.

Print Friendly, PDF & Email

Get the latest retail insights from Asia

just leave your details and we'll send it over

X