Idea Cellular lags Street estimates

Idea Cellular, the flagship mobile company of Aditya Birla Group, posted Rs 809-crore net profit for July-September quarter, lower than Rs 931 crore posted in the previous quarter because of seasonally weak period, the company said on Wednesday.

According to Bloomberg earnings estimate, the firm was expected to post net profit of Rs 835 crore with a revenue of Rs 8,768 crore. Idea reported a revenue of Rs 8,676 crore for the period, lower than Rs 8,794 crore in June quarter.

"With increasing proportion of rural subscribers, the seasonal slowdown in the second quarter is more pronounced this financial year, resulting in sharp contraction on sequential quarterly basis in the voice minutes of use by 3.2 per cent to 189.5 billion compared to 195.8 billion minutes in the first quarter," the firm said.

Idea's customer base includes a large number of customers from rural and small towns. The company attributes seasonally weak period to monsoon seasons when there are network connectivity issues in remote areas and it reflects in lower usage of voice minutes.

Besides, the company said pressure from mobile internet rate realisation was another factor that contributed to lower revenue growth.

The realisation had come down to 23.4p per megabytes in the quarter from 26.5p previously, the company said. In the past one year, the company added 26.3 million subscribers, taking its total customer base to 166.6 million.

Though there was 16.6 per year year-on-year rise in voice minutes usage and a sharp jump of 82.6 per cent in mobile internet usages during the quarter, a decline in mobile data realisation rate at 11.8 per cent affected its financial performances.