Idea Q2 profit falls 13%

Dylan Bushell-Embling
telecomasia.net
India's Idea Cellular revealed its Q4 profit fell 13% to 2.39 billion rupees ($45.6 million), as costs wiped out a 27% increase in revenue.
 
But the operator's profit was ahead of the expectations of analysts polled by Dow Jones, who had been predicting a net profit of 2.31 billion rupees.
 
Revenue reached 53.7 billion rupees, which compares to a median analysts' estimate of 53.05 billion rupees.
 
But like many Indian 3G operators, the company is struggling with a large debt burden accumulated from the payment of 3G spectrum and license fees during the 2010 3G auction. Idea paid 57.69 billion rupees for 3G spectrum in 11 circles during this auction.
 
Interest costs from loans taken out to pay this bill nearly tripled during the quarter to 2.28 billion rupees.
 
A 1.5 billion regulatory provision towards license and spectrum prices also impacted profit for the quarter.
 
The company added 6.4 million new customers during the quarter, while call traffic grew 9.1% from three months prior.
 

Idea Cellular is India's third largest mobile operator. The operator is one of eight companies affected by the supreme court's decision to cancel 122 2G licenses  that had been allocated in 2008.

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