Subscriber growth helps Idea post 5% rise in profit

Subscriber growth helps Idea post 5% rise in profit

Mumbai: Idea Cellular Ltd posted a 4.6% rise in profit for the quarter ended 31 March from a year ago, driven by subscriber growth that offset the effects of an ongoing tariff war amid mobile phone companies.

Profits rose to Rs266.6 crore from Rs255 crore a year earlier, while sales rose 13.8% to Rs3,347.7 crore from Rs2,941.6 crore. Profit included those from the operations of Spice in Punjab and Karnataka, which was fully absorbed into Idea with effect from 1 March.

Idea’s total subscriber base rose to 64 million from 39 million at the end of March 2009, while its revenue market share increased to 12.7% from 11.4% during the year.

Idea has stayed competitive at the end of “one of the worst years" for the industry, marked by a drop in call rates but no comparable growth in the average minutes of use, chief executive Sanjeev Aga said.

He said increasing competition and declining prices had its impact on the operations of Idea, one of which was the delay in becoming profitable in the new telecom circles where the company had launched operations in the last two years. However, in two of the new circles—Uttar Pradesh and Bihar—the firm expects to break even in six months. Idea does not expect “bad times to go away quickly". Aga said that the effects of the tariff war will linger for a few more quarters.

Shares of Idea gained 3.6% on the Bombay Stock Exchange to close at Rs63.40, while the exchange’s benchmark Sensex index fell 0.98% to 17,386.08 points on Monday.