Idea Cellular on Tuesday reported a net profit of Rs. 228.57 crore registering an increase of 14% during its third quarter ended December 3 on expansion of voice minutes.

The company said that in-spite of regulatory interventions impacting ‘Subscriber Acquisition’ & ‘Value Added Services’ business model, it posted a  sequential quarterly revenue growth of 5%.

The Standalone Revenue of Rs. 56,135 million during the quarter is an improvement of 10.8% on YoY basis against Q3FY12 revenue of Rs. 50,652 million.

“The quarterly revenue growth is primarily led by expansion of Voice Minutes @5.2% to 132.2 billion minutes compared to 125.6 billion minutes in Q2FY13, indicating consumer demand for voice telephony remains robust”, it said.

The company clocked 2.9 million VLR subscriber additions in Q3FY13 against 0.6 million additions in Q2FY13, despite implementation of stricter verification norms.

Idea said that contrary to expectation, the ‘Average Realised Rate per Minute’ (ARPM) fell this quarter to 41.1p against 41.3p/minute in Q2FY13. The challenge on ARPM is on account of fall in the ‘Non-Voice Revenue’ contribution to 14.6%, driven down 1% over the last quarter, by TRAI’s new VAS regulation.

The standalone EBITDA was at Rs. 13,173 million compared to Rs. 12,615 million in the previous quarter. The EBITDA margin is marginally lower @23.5% on account of higher inflationary burden in ‘Network operating expense’ led by full quarter impact of increased diesel price & larger outlay for ‘Advertising & Business Promotion’ expense. The cost of acquiring a customer also increased to meet the new guidelines on subscriber verification, largely offsetting the benefit of lower customer churn @ 6.9% and reduced gross additions.

Adverse currency movement has resulted in forex loss of Rs. 133 million during the quarter against a forex gain of Rs. 180 million in Q2, reflected in increased interest and finance cost (net).

Idea maintained trend of Free Cash Flow (after Capex but excluding spectrum payout). However, the PAT at Rs. 1,910 million and Cash Profit at Rs. 11,085 million for the quarter were lower compared to previous quarter primarily due to dividend payment received from Indus in Q2FY13.

In the recently concluded 1800MHz November 2012 spectrum auction, company won back spectrum in all 7 service areas for which licenses were quashed by the Hon’ble Supreme Court, at a bid amount of Rs. 19,848 million for a period of 20 years, ensuring continuity of services to more than 8 million Idea customers in these service areas and pan-India presence for the company.

“Idea continues to invest in long term value creators, launched 2,961 new sites (2G+3G), expanded optical fibre network to 71,600 km and strengthened network capacities in NLD, ILD, ISP, Data Services and Devices”, the company said in a statement.

Out of the existing 114 million subscriber base, the number of Idea customers adopting data services has exponentially grown to 21.75 million, now contributing 5.7% to Service Revenue. The Data volume grew by 14.8% to 9,575 TB in Q3FY13 (8,339 TB in Q2FY13), while data revenue on sequential quarter basis grew by 10.8%. The active 3G subscriber base for the company now stands at 4.1 million.

Idea said that it is confident to overcome the current uncertain regulatory phase, emerge competitively stronger as the overcapacity comes to an inevitable decline, consolidate its position in the telecom voice market and aggressively expand in the ever evolving wireless broadband business.

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