Idea Cellular has posted a year-on-year increase of 7.15 per cent in its net profits from Rs 7.55 billion during the quarter ended September 2014 to Rs 8.09 billion during the corresponding quarter in 2015. This can be attributed to a 14.8 per cent growth in its total revenue, which increased from Rs 75.69 billion to Rs 86.89 billion during this period. Higher revenues resulted in an increase of about 22.7 per cent in the earnings before interest, taxes, depreciation, and amortisation (EBITDA), from Rs 24.9 billion to Rs 30.57 billion.
The revenue growth was driven by an increase in subscribers, mobile data traffic and minutes of usage (MoUs). The operator’s subscriber base grew by 16 per cent from 143.6 million during the quarter ended September 2014 to 166 million during the corresponding quarter in 2015. The increase in its 3G subscriber base was even more pronounced, from 13.3 million to 24.5 million, a growth of 84.2 per cent. As a result, the total MoUs on the operator’s network increased from 162.45 billion to 189.45 billion and the average MoUs per user rose from 384 to 386. However, the ARPU fell from Rs 176 to Rs 175.
Rise in data usage
The total data volume carried on Idea’s network increased from 39.42 billion MB during July-September 2014 to 72.01 billion MB during the corresponding period in 2015. As a result, the share of data services in the overall service revenue increased from 14 per cent to 19.6 per cent. Meanwhile, the data usage per subscriber increased from 447 MB to 615 MB, leading to a growth in data ARPUs from Rs 119 to Rs 144. 3G data usage also increased from 693 MB to 802 MB. As a result, the 3G data ARPU grew from Rs 195 to Rs 202.
In addition, the share of value-added services in service revenue increased from 21.1 per cent to 27.9 per cent during the period under review.
Idea rolled out 3,701 2G cell sites and 6,246 3G cell sites during July-September 2015, taking the total number of sites to 119,276 and 39,867 respectively. The operator offers 3G services in 21 service areas, including 12 circles on its 3G network and the remaining through intra-circle roaming. It is taking steps to aggressively expand its 3G footprint and will soon be launching 3G services in the Kolkata circle. The operator also increased its total optic fibre network to 100,400 km.
Further, the operator is planning to launch 4G long term evolution (LTE) services using the broadband spectrum it acquired in the 1800 MHz band in the auctions held in February 2014 and March 2015. By 2016, Idea plans to roll out 4G across 10 service areas covering over 750 towns. These are Maharashtra and Goa, Andhra Pradesh, Madhya Pra-desh and Chhattisgarh, Kerala, Punjab, Haryana, Karnataka, Odisha, Tamil Nadu and the Northeast. To encourage the adoption of internet among the masses, the operator plans to introduce Idea-branded digital service applications like Idea Music, Idea Games, Idea Movies, Idea API and Idea Digital Wallets with a special focus on regional and vernacular content through planned investments in platforms and partnerships with application and content providers.
In addition, during the quarter, a licence was issued to Aditya Birla Nuvo Limited for the launch of a payments bank in partnership with Idea Cellular in 2016. The financial venture will profit from the telecom operator’s large subscriber base and retail presence in the country. It will also give Idea access to a significant amount of capital.
Net, net, Idea, with its deep rural 2G presence, expanding 3G network footprint and planned 4G LTE network launch, is well positioned to tap the mobile data and rural voice opportunities that the market offers, and strengthen its market standing.