Idea Cellular – Weak Quarter + 3G Weigh on Balancesheet for Next 3 Quarters
Idea Cellular – Pure Play 2G Wireless Operator reported a weak and a worse quarter, ending Sept-30. I don’t BUY the seasonality argument as pitched by management and other analysts as Telecom is the most affordable essential service [once upon a time luxury] the rural folks have. Telcos must devise a strategy to arrest such bumps. Here is an excerpt from the Results as well as Con Call
- ARPU for the quarter came in at Rs167, down 8.2%qoq and 21.6%yoy and unexpected ~5.1%qoq drop in usage/subscriber/month to 394mins (our and street est. 413mins). On the contrary, Uninor managed to increase its ARPU to Rs 91 from Rs 84 suggesting we maybe at the end of the Tariff war but not done yet.
- Pre-paid churn continues to remain high at 8.2%
- Management said that decline in revenue per minute was largely driven by acquisition products and retention initiatives and not headline rate cuts.
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