Idea faces its first net loss of Rs 384 crore in Q3 2016

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After the arrival of Reliance Jio, India's third largest telecommunication service provider Idea Cellular reported its first ever loss since its IPO in 2007.

"The Indian mobile industry witnessed an unprecedented disruption in the quarter of October to December 2016, primarily due to free voice & mobile data promotions by the new entrant in the sector," Idea said. The company further noted, "the sector can expect to recover revenues only once the new operator starts charging for its pan India mobile services."

"As a result of this current industry upheaval, the standalone Idea revenue dropped to an unforeseen level at Rs. 86,627 million, a decline of 6.9 per cent on sequential quarterly basis and standalone EBITDA fell to Rs. 21,655 million," Idea said.

Idea faces major loss: Reliance Jio partly responsible

The telcos total income also went down to Rs 8,706.36 crore for the quarter, from Rs 9,032.43 crore in the same period in the previous year.

SEE ALSO: Jio to offer 6 series mobile number in Tamil Nadu, Rajasthan and Assam

The Aditya Birla Group which is in talks with Vodafone for a proposed merger says,
"In an effort to retain its existing mobile subscribers, the company was forced to reduce on sequential quarterly basis its voice rates by 10.6 per cent to 29.6 paisa per minute."

"Despite an unprecedented outgoing voice rate fall, the lure of free offerings resulted in lower than normal volume elasticity with the quarterly sequential voice minutes growing only by 7.3 per cent to 210 billion minutes, that too led by double digit growth in incoming call volume," Idea added.

The company's net debt stood at Rs 49,140 crore at the end of December 2016.

Idea's capex spent was Rs 2,000 crore (excluding forex and interest capitalisation) in the reported quarter.

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