Mumbai: Growing subscriber base and entry into new markets helped Idea Cellular Ltd, the fifth-largest cellular telephony company in India, record a net profit of Rs193 crore for the quarter ended 31 March, a 65.6% rise from the same quarter last year.
The total revenue of the company grew 54.9% on a year-on-year basis to Rs1,341.1 crore for the quarter. The Idea stock closed at Rs117.5, up 2.9% on a day when the 30 share Sensex rose 0.57%.
Idea also crossed the $1-billion mark in annual revenues in 2006-07; it recorded Rs4,412.9 crore in total revenues for the financial year, a 47.6% year-on-year growth. Net profit of the company for the same period grew 137.7% to Rs503.3 crore.
“Idea Cellular ended the year with a subscriber base of 14.01 million, a 90.2% growth over the previous year-end, and reflecting an improvement in national market share from 7.65% to 8.63%,” said the company. Bharti Airtel, the country’s largest cellular telephony company, ended March 2007 with a subscriber base of over 37.14 million.
Idea currently operates in 13 out of the 23 telecom circles in the country. In the last quarter of 2006, it started its operations in UP east, Rajasthan and Himachal Pradesh. The company has already got licences for the Mumbai and Bihar circles and it is expecting to roll out services in these circles this year. Idea has announced a capital expenditure of $2 billion for the next two years.
Idea Cellular, part of $12 billion Aditya Birla Group, raised Rs2,500 crore through a public issue of shares @Rs75 per share in February 2007. The company has used Rs756.33 crore of this amount for redemption of preference shares and Rs131.22 crore for expansion of its network in the new circles.
The company also entered into an IT outsourcing pact with information technology firm IBM. The 10-year contract is valued at between $600 million and $800 million. “The outsourcing deal will help more in the operational efficiency (area) as the company rolls out its operations in new circles. In the long term, it will help the company improve its operating margin,” said Naveen Kulkarni, research analyst, Religare Securities Ltd.
The company has an average revenue per user (Arpu) of Rs277.45 for the quarter ending 31 December 2006, compared with Bharti’s Arpu of Rs343.17 for the same quarter.
In a conference call with the analysts, Idea said it expects to get the spectrum allocated for rolling out operations in Mumbai and Bihar in next two months.
The company is also keen on developing its small national long-distance business that contributed Rs77.9 crore to its revenue in 2006-07.