Idea Cellular Ltd. posted wider-than-anticipated loss in the second quarter due to lower revenue, amid high levels of competition in the industry.
Net loss rose to Rs 1,106.6 crore during the three-month period ending September, the Mumbai-based telecom operator said on Monday. That compared to a loss of Rs 1,080 crore predicted by analysts tracked by Bloomberg.
Revenue fell 8.6 percent quarter-on-quarter to Rs 7,465.6 crore, again lower than the Rs 7,619 crore estimate. The average revenue per user was Rs 132 during the previous quarter.
The September quarter was a weak quarter. The debt levels remain to be steady as the operating income is declining. The voice and data rates continued to fall during the period. The impact of low interconnection usage charges can be seen in the next few quarters as well.Himanshu Kapania, Manading Director, Idea Cellular
The operating income fell nearly 20 percent to Rs 1,502 crore, sequentially. Margins contracted 280 basis points to 20.1 percent during the quarter.
Shares of Idea Cellular rose as much as 3 percent to Rs 99.90. That compares with the slight change in the S&P BSE Telecom Index.
Tower Sale
The company, along with Vodafone India Ltd., approved the sale of their respective standalone telecom tower business to ATC Telecom Infrastructure Pvt. Ltd.
The deal has been struck at an aggregate enterprise of Rs 7,850 crore, according to Idea Cellular’s exchange filing. The combined portfolio of Idea Cellular and Vodafone India consists of approximately 20,000 towers, with a combined tenancy ratio of 1.65 times as of June 30.
The tower asset was a non-strategic asset for the company and we are extremely pleased with the valuation. There will be no exit penalties that needs to be paid.The proceeds of the deal to be used to bring down debt. Besides, Idea will separately get Rs 4,000 crore from ATC Deal.Himanshu Kapania, Manading Director, Idea Cellular
“Vodafone India was supposed to bring in a net debt of Rs 55,200 crore when was the deal announced. However the exact debt that comes in depends on Idea’s net debt at completion of deal as well as customary closing adjustments,” Kapania said.
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