Jio impact: Idea reports Rs 328-crore loss in March quarter

YB WEB DESK. Dated: 5/15/2017 1:23:41 AM


Reeling under the impact of free services by Reliance Jio, the country’s third-largest mobile operator Idea Cellular on Saturday posted a less-than-estimated loss during the January-March quarter due to a tax writeback of Rs 379.2 crore. The company’s consolidated net loss narrowed to Rs 328 crore, compared with a net loss of Rs 384 crore in the preceding quarter. A Bloomberg consensus estimate of 15 analysts had expected the company to report a loss of Rs 719.5 crore during the quarter.
This is the second consecutive quarter in which Idea has reported losses. During the October-December quarter, it posted a net loss for the first time since its listing in 2007.
Revenues during the period declined 6.2 per cent sequentially to Rs 8,126 crore. Its earnings before interest, taxes, depreciation and amortisation (Ebitda) during the quarter, similarly, at Rs 2,196 crore, came in significantly higher than the estimated Rs 1,920 crore.
Without naming Reliance Jio, the company said, “The Indian wireless industry witnessed an unprecedented disruption in the second half of fiscal year 2017 on account of free voice and mobile data promotions by the new entrant in the sector.” It, however, added that with Jio starting to charge for its services, growth is expected to come back in the current financial year, albeit very slowly.
Idea, like Bharti Airtel, has approached the Telecom Disputes Settlement and Appellate Tribunal, where it has challenged Telecom Regulatory Authority of India’s passive approach towards Jio’s free services, which, it contends, is not allowed under regulations.
In a bid to blunt the force of Jio’s free offers, Idea, like other telecom operators, adopted the strategy of offering more data at lower prices and bundling it with free voice in some packages, which led to a decline in its voice and data realisation.

 

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