Idea Cellular posts 26% increase in Q2 FY 2012 revenue; crosses 100 million subscriber mark



Idea Cellular reported 26 percent increase in consolidated income during
Q2 FY 2012 at INR 46,199 million as compared with INR 36,592 million in Q2 FY


The growth in revenue is
primarily driven by the company’s new milestone of 100 million customers.
However, the increasing proportion of rural subscribers has prompted the
company to report 2.2 percent sequential revenue growth after high growth of
6.7 percent and 7.0 percent in the previous two quarters.


In H1 FY 2012, Idea Cellular‘s income increased to INR 91,406 million from INR 73,129 million in H1 FY 2011,
clocking 25 percent growth.


The company’s move to new services areas affected its profitability. Net
profit decreased to INR 1,058 million in Q2 FY 2012 from INR 1,797 million,
showing a decline of 41 percent. In the first half of the current, its net
profit declined to INR 2,830 million from INR 3,811 million in H1 FY 2011.


As Idea Cellular’s subscriber base touched 100 million, the company also
continued its record of the highest active subscriber ratio (VLR), in the
industry, which was 92 percent of its total subscriber base, as reported by
TRAI on May 31, 2011.


The voice -minutes of use’ contracted, due to seasonality, by 2.2 percent
to 106.2 billion compared to the last quarter. However, the depression in the
minutes has been compensated with a 4.2 percent improvement in Average Realized
Rate (ARR) from 41.0p to 42.7p.


Factors supporting improvement in ARR are increase in VAS
contribution, up from 12.1 percent to 13.2 percent, roaming revenue and
revision in promotional tariffs.


Idea Cellular recently increased its 2G prepaid tariffs by 20 percent,
following continued low margins and sharply falling ARPUs. However, the company
has continued with its special discount offers for its 2G and 3G customers,
which have helped it to grow its subscriber base.


The company’s 3G investment plans are on track and high speed broadband
services are now available across 1,600 towns, in 20 service areas (including
3G roaming arrangement) in India.


Idea Cellular also expanded its 3G services to Jammu and Kashmir.


The 3G services will help Idea’s 100 million subscribers to move to the
new digital age as the company gears itself to participate in NTP 2011 vision
of -Broadband for All’. The NTP 2011 is expected to usher in the next stage of
inclusive growth.


In April, Idea Cellular said that it had a 3G launch target of 750 towns in India by mid-2011.


Idea’s strategy to strengthen presence in 13 established service areas
has helped it sustain its position as the fastest growing large Indian telecom
operator, reaching national revenue market share of 13.9 percent in Q1 and
retaining its MNP Leadership with a net gain of 1.3 million subscriber.


By Team
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