Price war impacts Idea’s second quarter profit; 3G expected to boost revenues

26 Oct 2010

Second-quarter consolidated net profit for Indian mobile network operator Idea Cellular fell by 18.4%, with the cellco attributing the decline to continued hyper-competition and lower call prices. In the three-month period ended 30 September 2010 Idea posted a consolidated net profit of INR1.797 billion (USD40 million), down from INR2.202 billion a year earlier, while revenue for the quarter stood at INR36.592 billion, up from INR29.739 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) was INR8.788 billion in 2Q10, up from INR8.095 billion in the corresponding period the previous year. Commenting on the results, Sanjeev Aga, Idea’s managing director, noted: ‘[The] September quarter is weak in terms of demand, but now the price cuts are slowing, the economy is on a rebound and next fiscal year we will also have extra revenue coming from 3G.’

Having spent INR57.69 billion on acquiring 3G spectrum for eleven of India’s 22 telecom circles, the operator has said it plans to spend around INR30 billion over the next twelve to 15 months on rolling out services, with a commercial launch expected by end-January 2011.

India, Idea Cellular,


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