Idea Cellular turns loss into profit in Q1FY19; posts Rs 256 crore profit this quarter, blames RJio for ARPU

Telecom service provider Idea Cellular reported a very good June 2018 quarter (Q1FY19), by posting net profit of Rs 256.5 crore. With this, the company has turned its losses which was witnessed since last fiscal into a profit. Idea had recorded net loss of Rs 962.2 crore in Q4FY18 and loss of Rs 815.9 crore in Q1FY18. Also for entire fiscal of FY18,  the company’s loss stood at Rs 4,168.2 crore. Following the result announcement, the share price of Idea Cellular gained over 4% today, before ending at Rs 58.45 per piece above 3.63% on BSE. 

However, the company’s revenue stood at Rs 5,889.2 crore which was down by 27.89% from Rs 8,166.5 crore in Q1FY18 and below 4.04% as against Rs 6,137.3 crore in Q4FY18. 

The result also surpassed analysts estimate in terms of bottom-line but missed in regards to top-line. A Bloomberg poll of experts had predicted net loss of Rs 1,529 crore and a revenue of Rs 5,967 crore for Idea this quarter. 

Meanwhile, standalone PAT stood at Rs 509.2 crore compared to losses of Rs 1,017.9 crore and Rs 617 crore in Q4FY18 and Q1FY18 respectively. 

In its audit report, Idea took a moment to explain about the disruption caused in telecom sector by Reliance Jio. The company mentioned that during the quarter, the Indian mobile industry continued to decline under pressure from heavily discounted unlimited voice and bundled data plans & subsidised 4G feature phone from one of the operator, forcing commensurate response from other existing mobile operators to retain subscribers. 

Idea adds, “The sector presently offers voice and data unlimited bundles at unsustainable below cost price levels impacting the financials of all incumbent operators. As existing customers continue to prefer lower value deep discounted unlimited voice and bundled data plans, the Average Revenue Per User (ARPU) remained under pressure. 

Idea also stated that, the decline in their revenue was mainly on account of down trending of ARPU representing a normalised decline. 

Idea’s ARPU for the quarter was at RS 100 as against Rs 105 in Q4FY18. 

Idea’s VLR subscribers as on June 30, now stands at 203.4 million with a market share of 20.9% - an improvement of 1.4% compared to May 2017. 

Further, the quarterly voice minutes at 349.5 billion, grew at a staggering rate of 39.4% vs 250.7 billion minutes in Q1FY18. 

Similarly, broadband data usage per broadband data subscriber has risen sharply to monthly usage of 8GB in Q1FY19 compared to 3GB per month a year ago same period. 

Going ahead, the broadband data volumes in Q1FY19 reached level of 992 billion MB more than 4 times compared to mobile broadband data volumes a year back. 

Now Idea’s wireless broadband subscriber base stands at 41 million - an addition of 14.6 million broadband data consumer over last one year.