|
| Idea Cellular: More for Mumbai |
| Shobhana Subramanian / Mumbai Sep 30, 2009, 00:26 IST |
|
Idea Cellular, which rolled out its mobile services in Mumbai a year ago, is attempting to fight the competition in the city by offering special rates of 50 paise for both local and STD calls on any network. The Rs 10,120 crore firm has been doing well in Mumbai and added 100,000 subscribers in August as against 72,000 in June.
 However, the telco hasn’t fared too well in some other circles and therefore net additions declined in July to 1.37 million. The additions in its eight legacy circles were low, implying that the operator was finding it tough to hold on share in its incumbent circles. However, the performance in August was better with net additions of 1.44 million and pushed up the telco’s subscriber base to 45.6 million.
Idea, which launched in Chennai in July, turned in fairly good operating margins in March and June quarters. Analysts point out that not only was it able to improve margins in the 11 existing circles by 750 basis points over the past nine months, it also managed to arrest operating losses in new circles. That’s despite the launch in two new circles.
Idea will roll out its network in five new circles in the next six months but with telecom operators relying increasingly on shared towers to expand in rural markets, analysts believe capital expenditure could now be lower than what was expected earlier. However, losses in these circles will depress the profits.
The Idea stock has gained 65 per cent since March, outperforming market leader Bharti Airtel. At the current price of Rs 76, the stock trades at around 20 times estimated 2009-10 earnings and 17 times 2010-11 earnings, and any meaningful upside could result only from an M&A deal.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
