Idea Cellular has posted a loss of Rs 1,106.80 crore for the second quarter of the current fiscal, saying that the business was hit by pricing pressure and GST introduction in a "challenging" operating environment.
The company -- which is headed for a merger with Vodafone India -- had reported a net profit of Rs 91.5 crore in the July-September quarter of the last fiscal.
"The operating environment for Indian mobile operators remained challenging with unrelenting pressure on pricing, introduction of Goods and Services Tax at 18 percent (compared to service tax at 15 percent) and need for large investments to support the exploding data demand," Idea said in a statement.
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 as always given its higher share of rural subscribers, Idea said.
Its revenue from operations fell 19.72 percent to Rs 7,465.5 crore in the July-September quarter of the current fiscal, from Rs 9,300.3 crore in the year-ago period.
Shares of Idea were trading 2.78 percent down to Rs 94.35 a piece on BSE.
The company said its while broadband data usage nearly doubled, the rate realisation "continued its free fall" during the three months ended September. The voice realisation rate fell by 9.9 percent over the June quarter, and mobile data realisation fell more sharply by 49.2 percent.
The revenue per subscriber also fell by 6.6 percent to Rs 132 as against Rs 141 in June quarter.
Idea's sequential quarterly voice minutes grew by 1.7 percent to 255 billion minutes (against decline of 1.9 percent in Q2FY17) and mobile data volume saw strong sequential growth of 73.5 percent.
The company is on course to introducing Voice over Long-Term Evolution (VoLTE) -- a standard for speedy wireless communication -- by early 2018, the statement added.
Idea and Vodafone India have recently entered into active infrastructure sharing arrangement, to avoid duplication of spends and make best use of capex (capital expenditure), the statement added.
The Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) for the quarter declined nearly 20 percent to Rs 1,501.6 crore hit by lower revenue and higher operating cost related to roaming and access (as outgoing minutes increased) and as also annual increments.
Besides, the depreciation and amortization charge increased to Rs 2,114.3 crore and interest and financing cost rose to Rs 1,182.9 crore as the company continued to aggressively invest in expanding its 4G footprint, the statement added.
Idea's net debt as on September 30, 2017 was Rs 54,100 crore, including a large component of deferred payment obligation for spectrum acquired in auctions.
Idea said its merger plans with Vodafone India is on track and the final petition for approval of scheme of arrangement has been filed with the National Company Law Tribunal (NCLT). The approval of shareholders and creditors for the merger has already been taken following a meeting organized by Idea under NCLT's supervision in October, it noted.
Idea and Vodafone have also decided to sell their standalone tower business in India to ATC Telecom Infra for Rs 7,850 crore. Idea will get Rs 4,000 crore (and Vodafone Rs 3,850 crore) from the tower deal if sale completion precedes telcos' merger.
"On completion of Idea and Vodafone India merger, 6,300 co-located tenancies on the combined standalone tower businesses will be merged into single tenancy, within a staggered period of two years, without a penalty fee," the Idea statement added.
The established telecom operators have seen locked in a fierce tariff war to protect their turf, following the entry of aggressive newcomer Reliance Jio in the market.
The incumbent operators have blamed competitive pressures triggered by the free and disruptive offers of Jio, for the financial stress in the sector.
India's telecom company Bharti Airtel posted 76.5 percent fall in consolidated net profit to Rs 343 crore for the September quarter. – Business Standard