Idea's net profit doubles to Rs 467.7 crore

Growth higher than Bloomberg estimates which expected its net income to grow by 96%

Idea Cellular, India’s third-largest mobile phone service provider, reported a net profit of Rs 467.7 crore in the December 2013 quarter, a 104 per cent growth over the year-ago figure of Rs 228.5 crore. The growth, which is higher than Bloomberg’s estimates of 96 per cent, has been helped by an increase in data usage volumes, voice minutes and active subscribers.

The company’s net revenues also grew 18.5 per cent to Rs 6,613 crore from Rs 5,578 crore in the December 2012 quarter. The minutes of usage for the quarter under review grew annually by 9.4 per cent as data volumes went up by 107.6 per cent.

“We had the highest growth in active subscriber base across the industry,” said Himanshu Kapania, managing director of Idea Cellular.

The company has also reduced its net debt by Rs 341 crore during the quarter, which is now down to Rs 8,945 crore, on the back of healthy cash flows. “Our net debt is now at 1.23 times of the earnings before interest tax depreciation and amortisation,” said Akshay Moondra, chief financial officer of Idea.

The telco also reported a healthy growth in incremental revenue market share, which is at 35 per cent. “The incremental growth is better than that of the top two players,” said Kapania. He added the quality of subscriber base has improved as its average revenue per user (Arpu) increased by Rs 11 annually, to Rs 169 a month.

While non-data value-added services (VAS) such as text messaging declined in volume, data VAS grew. “The higher mobile data adoption has primarily led to VAS growth with data revenue as a percentage of service revenue improving from 3.8 per cent to 9.5 per cent in the last one year,” said Ankita Somani, research analyst at Angel Broking.

Idea removed incidental and accidental data users from its reportage, hence reducing its overall mobile data user base to 25.5 million. Its 3G subscriber base stands at 8.7 million, as it added more than half of it in the past year. “The mobile data Arpu, however, increased by Rs 39 to Rs 91 in the third quarter,” the company said in a release.