Haunted By Jio, Idea Posts Q4 Net Loss Of Rs 325 Crore, Second In A Row

Idea Cellular posted its net loss for the second quarter in a row. In the Q4, Idea Cellular posted a loss of Rs 325 crore compared to a loss of Rs 386 crore in Q3. The company had posted a profit last in its Q2, a meager Rs 90 crore.

For Idea it was unprecedented as the Aditya Birla group had never seen any losses since its gone public a decade back. The company has been blaming the new operator for the loss.

Revenue wise too, the company posted a consolidated total of Rs 8126 crore in Q4 compared to Rs 8663 crore in Q3, showing a dip of 6.2%. This dip is lower compared to 6.9% decline it had posted in Q3 as compared to Q2 of 2017.

In Q3, 2017, Idea Cellular’s revenue was Rs 9300 crore.

For the full year of FY 2017, the company has posted a revenue of Rs 32,959 crore compared Rs 33,558 crore in FY 2016, showing a dip of 1.8%.

“The Indian wireless industry witnessed an unprecedented disruption in the second half of financial year 2016-17 (FY17) on account of free voice & mobile data promotions by the new entrant in the sector. The October to April 2017 interval can be best described as ‘Period of Telecom Discontinuity’, permanently changing mobility business parameters. Consequently, the revenue KPIs & financial parameters for all mobile operators have sharply declined in H2FY17,” the company said while announcing its Q4 and full year financial results.

“For the first time in its history, the flourishing Indian Mobility industry, is trending towards an annual revenue decline of ~2% in FY17 (vs FY16). With the new entrant starting to charge for its services, albeit very slowly, the sector is expected to return to growth in the next financial year,” it further added.

The company said it had to many drastic steps during the period to retain its existing subscribers who, could have been tempted to move to other operators.

In an effort to retain its existing mobile subscribers, Idea was forced to reduce its voice tariff by by 12.5% to 25.9 paisa/min (vs. 29.6 paisa in Q3FY17) as also steeply drop its mobile data rate by 27.6% to 11.5 paisa/MB (vs. 15.9 paisa in Q3FY17).

“However, the lure of free offerings by the new mobile operator resulted in lower than normal volume elasticity with sequential quarterly voice minutes growing by 10.3% to 231.4 billion minutes (vs. 209.8 billion minutes in Q3FY17),” said the operator.

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