Idea Cellular delivered a set of numbers that convincingly beat market expectations for the March quarter.

Continuing focus on adding more remunerative subscribers, including 3G customers, increasing usage of minutes on its network and stable realisations were key positives for the company. The average revenue per user (ARPU) too improved in the quarter.

Idea’s revenues grew 8.6 per cent over the same period last year to Rs 6,061.4 crore, while net profit rose by nearly 29 per cent to Rs 308.2 crore. Network expenses were contained, while lower outflows on account of finance charges meant that profits jumped impressively.

Operating (EBITDA) margin has been improving steadily and now stands at 27.6 per cent, up 2.3 percentage points over the same period last year.

The company has also been able to reduce losses in the service areas where it launched operations relatively recently – over the past 2-3 years, suggesting that it has made reasonable inroads into key geographies.

After two quarters of decline in subscriber additions, Idea witnessed a sharp turnaround and was able to increase its customer base by 7.7 million to 121.6 million.

Its ARPU increased to Rs 167 from Rs 158 in the previous quarter, while realisations per minute remained stable at 41.2 paisa. Minutes of usage increased to 406.

Customer addition

It is interesting to note that the company added 1 million customers for its 3G services. This base, which stands at 5.1 million, has been steadily increasing for the past 3-4 quarters and could enhance ARPUs and realisations.

Also, Idea continued to focus on maintaining a lucrative subscriber, where customers recharge regularly and use the services. The current proportion of active subscribers stands at 98.4 per cent for the company, the highest in the industry.

The near term challenge for the company would be the restriction imposed by the Department of Telecom by asking Idea Cellular, Vodafone and Bharti Airtel to stop their 3G roaming pacts.

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