Due to changes in the TRAI Interconnect (IUC) regulations (Amendmend XIth and XIIth) effective from March 01, 2015 primarily reducing mobile incoming IUC charges from 20p to 14p/min the revenue figures for this quarter are not comparable to earlier quarters. The gross revenue for Q1FY16 is negatively impacted by Rs 3,170 million (compared to Q1FY15), due to IUC rate changes. Additionally, implementation of TRAI Roaming TTO (Sixtieth Amendment) effective from May 01, 2015 reducing the upper cap for national roaming voice call charges and SMS charges between 20 per cent-75 per cent and increase in service tax rate effective from June 01, 2015 from 12.36 per cent to 14 per cent have also impacted the financial results for this quarter.
Inspite of the above, Idea, has started the new financial year with 16.4 per cent YoY growth in gross revenue in Q1FY16 at Rs. 87,965 million. On the sequential quarterly basis the gross revenue has grown by 4.5 per cent in Q1FY16 (normalized for IUC change QoQ revenue growth @6.9 per cent) primarily driven by a) 4.4 million active subscribers addition (VLR), b) expansion of voice minutes @ 5.8 per cent clocking 195.8 billion minutes on Network and c) 15 per cent Mobile data (2G+3G) volume growth to 62.7 billion Megabytes.
Idea standalone EBITDA grew by 31.1 per cent in Q1FY16 and stands at Rs. 29,613 million, helping EBITDA margin to improve YoY by 3.8% to 33.7%. Further, even after accounting for higher Depreciation & Amortisation charge and high interest charge (including interest charge for upfront payment for Mar’15 auction and for Delhi 900 MHz spectrum), the company delivered ‘Profit After Tax’ (PAT) at Rs. 8,401 million, a growth of 29.4 per cent in comparison to PAT of Rs. 6,495 million (excluding Indus dividend Rs. 3,623 million) in Q1FY15. At consolidated level including 16 per cent of Indus contribution, the gross revenue in Q1FY16 has grown by 16.4 per cent to Rs. 87,983 million, the EBITDA at Rs. 32,284 million grew by 28.9 per cent, EBITDA margin improved by 3.6 per cent to 36.7 per cent and Q1FY16 PAT at Rs. 9,308 million, a growth of 27.8 per cent (v/s Q1FY15).
Idea clocked 24.9 million annual net VLR subscriber additions between July’14 to Jun’15 against 18.6 million additions in the same period previous year and is now servicing 165.8 million quality consumers in India. Competitively, the company has improved its standing with Customer Market Share (on VLR) @18.9 per cent (May’15) and Revenue Market Share (RMS) @18.2 per cent in Q4FY15, an RMS improvement of over 1.6 per cent compared to Q4FY14. Despite the large subscriber addition the quality of Idea’s overall consumer base has been steady with ARPU at Rs. 182 (v/s Rs. 181 in Q1FY15) and Voice usage per subscriber at 408 minutes (v/s 401 minutes in Q1FY15).
Since 2010, in the last 4 spectrum auctions, with a commitment of Rs. 483,616 million for spectrum, Idea has managed to improve its spectrum portfolio from 101.8 MHz (March 2010, excluding 7 cancelled licenses) to 270.7 MHz. The company is slated to launch its Kolkata 3G services by end of this calendar year.
Idea has also initiated multiple steps towards introduction of 4G LTE services on 1800 MHz spectrum band in 10 service areas of Kerala (10 MHz), Maharashtra & Goa, Andhra Pradesh, Karnataka, Madhya Pradesh & Chhattisgarh, Punjab, Haryana, North East, Tamil Nadu and Orissa (5MHz each), in a phased manner from calendar year 2016 onwards. The company is also in the process of revisiting its existing Value Added Services offering and intends to introduce its own range of ‘Digital Services’ across various categories like entertainment, information, communication, utilities and API services etc. in next financial year.
“As mobility market services expand, Indian telecom business offers exciting growth opportunities in Mobile broadband & rural voice telephony. Brand Idea with increasing consumer affinity, strong cash flows, Pan India 2G presence, expanding 3G network footprint & planned 4G network launch is gearing itself to strengthen its market position and improve standing across existing and emerging opportunities,” an Idea statement said.