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Jio Effect : Idea Cellular Revenue Drops To Unforeseen Level

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Idea Cellular today announced its financial results for Q3 and what we witnessed today has not happened in the last 10 years for the Aditya Birla Group run operator. Even in its own terms, Idea Cellular admits the company’s revenue has dropped to an unforeseen level.

The company posted revenues of Rs 8663 crore in Q3 2017 compared to Rs 9300 crore in the previous quarter showing a dip of 6.9% sequentially. This dip was seen across it operating circles.

More shocking is, Idea posted a loss of Rs 386 crore in this quarter compared to a profit of Rs 90 crore in Q2. On a standalone basis too, the firm posted loss of Rs 479 crore compared to a profit of Rs 4 crore. This had never happened since 2007 when the company went public.

The company attributed this negative development to Reliance Jio, of course without exclusively naming it but referring it to as a new operator.

“The Indian mobile industry witnessed an unprecedented disruption in the quarter of October to December 2016, primarily due to free voice & mobile data promotions by the new entrant in the sector,” Idea said in a statement.

“Consequently, revenue KPIs and financial parameters for all mobile operators have sharply declined, and for the first time in its history the flourishing Indian wireless sector is trending towards an annual revenue decline of 3 to 5% in FY2017 (vs FY16). The sector can expect to recover revenues only once the new operator starts charging for its pan India mobile services.”

Idea Cellular said because of this new operator and the difficult trends in the industry it was forced to reduce voice rates by 10.6% per minute and mobile data rates by 15.2% per megabyte. The company also said that because of the free offering, both on voice and data, Idea lost 5.5 million mobile data users during this period.

Tags : idea net profitidea q3 resultsidea resultsidea revenue
Gyana Ranjan Swain

The author Gyana Ranjan Swain

Tracking the telecom industry for last 14 years, Gyana has worked in cross platform media ranging from broadcast, print, wire agency and online. With an entrepreneurial bent of mind, he loves to write about how technology helps transform lives. He has also founded M2MCafe.com, a news portal on Internet of Things.

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