Idea Q4 net profit drops 12.7%

Aditya Birla group company Idea Cellular today announced a 12.7 per cent drop in its consolidated net profit to Rs 239 crore in the quarter ended March, as compared to Rs 274 in the same quarter last year.

The company’s total income grew by 27 per cent to Rs 5,369 crore from Rs 4,234 crore in the corresponding quarter last year. Minutes of usage (MoU) during the quarter also expanded by 9.1 per cent, on the back of 6.4 million active subscribers added during the same time.

The operator also gave a capex guidance for 2012-13 at Rs 3,500 crore, which is comparable to last year’s capital expenditure of Rs 3,600 crore. This spend will exclude any possible spend on account of spectrum.

Idea made a provision of Rs 150 crore for the quarter on account of regulatory uncertainty and is not in favour of the recent recommendations by Trai on spectrum auctions.

Kapania said that the time for re-farming spectrum has not come. “India is an under-penetrated telecom market, and voice should remain a priority,” he said. The case for merging wireless broadband with voice is far into the future, according to him.

TRAI also suggested a high reserve price for spectrum. This could affect Idea, as its nine licences stand to be cancelled as a part of the Supreme Court order which came in February.

“The pricing is arbitrary, inconsistent and regressive. It will push telecom sector back multiple decades. Aggressively priced voice minutes are necessary,” said Kapania.