• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books
• Gallery

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Shashi Ashiwal

Pricing pressure: The Managing Director of Idea Cellular, Mr Sanjeev Aga (left), and the CFO, Mr Akshay Moondra, at a press conference in Mumbai on Monday. —

Our Bureau

Mumbai, Oct. 26 Aditya Birla group company Idea Cellular has reported a 52-per cent rise in the consolidated net profit to Rs 220.1 crore (Rs 144 crore) for the quarter ended September 30, driven by subscriber growth.

However, on a sequential quarter basis, the telecom operator’s net was down by nearly 26 per cent.

Citing seasonality of revenues, Mr Sanjeev Aga, Managing Director, said, “The rural segment has increased from last year and currently forms a significant chunk of our revenue pie. The July-September quarter historically marks seasonally subdued demand and that coupled with weak monsoons impacted our revenues during the quarter.”

However, with monsoons back to normal, rural demand can be expected to return, he added. For Idea, the rural segment accounts for 40 per cent of total sales and 50 per cent of net subscribers.

The revenues for this quarter for the company stood at Rs 2973.9 crore (Rs 2303.3 crore) while the EBITDA (earnings before interest, tax, depreciation and amortisation) was Rs 809.5 crore. The company faced a drop in average realised rate per minute on a sequential basis for the second fiscal quarter to 56 paise (58p) due to the recent intensification in tariff wars by various telecom players. “There is significant overcapacity in the market. Coupled with multiple SIM ownership behaviour by subscribers, there would be further pricing pressure,” said Mr Aga.

The current low-tariff model is unsustainable and a shakeout of the telecom industry is possible as early as next year, he added.

More Stories on : Financial Performance | Telecommunications | Idea Cellular Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line