Idea Cellular Q3 net dips to Rs.170 cr

NEW DELHI, INDIA: Idea Cellular, India's fifth-largest cellular operator, reported consolidated quarterly net profit of Rs.170.11 crore for its fiscal third quarter ended December a dip of over 22.5 per cent compared to the Q2 net profit of Rs 220.2 crore. In the year-ago quarter Idea had a net profit of Rs 219.5 crore.

However, net sales for the quarter increased to Rs.3149.47 crore from Rs.2730.50 crore in the year ago quarter.

Idea said the nine-month period ending December 2009 placed a ‘double stress test’ upon the company's business model.

“On the one hand, the Indian telecom market, with already the world’s lowest tariffs, witnessed savage competitive price cuts during this period. Consequently, Idea incurred an erosion in average realised rate per minute (ARR) to 51p in the quarter ending December 09, down 15 per cent, in just 9 months,” it said in a regulatory statement.

As a second stress point, Idea rolled out operations in 7 new service areas during this 9 month period, thereby absorbing an incremental EBITDA loss of Rs 1,92 crore for these brand-new launches, and correspondingly higher loss at the PAT level, it added.

Despite these double stresses, for the first nine months of FY10, standalone PAT was up by 12.1 per cent compared to the first 9 months of FY09, while cash profit of Rs 2138.4 crore was up by 28.9 per cent, said Idea.