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Jio impact: Idea Cellular posts second straight quarterly loss

Company's Q4 loss at Rs 328 cr, compared with Rs 452 cr profit a year ago

Reuters  |  Mumbai 

A man walks past a shop displaying Idea Cellular Ltd's logo on its shutters in Mumbai
A man walks past a shop displaying Idea Cellular Ltd's logo on its shutters in Mumbai

Ltd, India's third-biggest telecoms operator, posted its second straight quarterly loss after a rival carrier's free services hit sales and eroded margins.

The free offerings of Reliance Industries' telecoms venture Jio, which started operations late last year, have sparked a fierce price war in the world's second biggest mobile phone market, forcing rivals such as Idea to launch cheap service plans.

That has impacted revenues and profitability across the uber-competitive telecoms sector.

Idea, part of the Aditya Birla conglomerate, on Saturday said it made a consolidated net loss of about Rs 328 crore ($51.06 million) in the three months to March 31, compared with a net profit of about Rs 452 crore a year ago.

Analysts had, on average, expected the wireless carrier to post a loss of Rs 714 crore, according to Thomson Reuters data.

The group's net loss from its core telecom operations, which does not include its stake in a telecom tower joint venture, was even higher at 4.3 billion rupees on a standalone basis.

"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," the company said in a statement.

Idea cut voice tariffs by 12.5 per cent while data prices were reduced by 27.6 per cent in the quarter, compared with the three months to December, it said.

Net sales fell 14.3 percent on year to about 81.10 billion rupees in the December quarter, Idea said.

India's top telecom operator last week reported its smallest quarterly profit in more than four years.

Jio's onslaught had also forced rivals to re-group to remain competitive.

Group Plc's Indian subsidiary and Idea have agreed a $23 billion merger that will create the market's biggest carrier while Bharti has taken over Norwegian Telenor's operations in six Indian states.