ibnlive » Business

Oct 26, 2007 at 02:04am IST

Idea Cellular reports decline in profit

New Delhi: Aditya Birla Group firm Idea Cellular on Thursday reported a PAT of Rs 220 crore in quarter ended September 30 against Rs 308 crore in the corresponding quarter.

PTI quoted Idea official saying that the dip in the profit was due to one-time gain of Rs 78 crore by the company through Forex and treasury gains in Q2 FY07.

However, the revenues for the company were up 55 per cent at Rs 1,565 crore.

AN IDEA: The revenues for Idea Cellular were up 55 per cent at Rs 1,565 crore.

“In the reporting quarter the company added 2.55 million subscribers to its existing base of 18.67 million. However, both the rate per minute and average revenue per user (ARPU) has witnessed a dip, “ PTI quoted Idea MD Sanjeev Aga as saying.

"Our rate per minute was down from 0.84 paise to 0.80 paise while ARPUs were down from Rs 381 to Rs 360," Aga added.

The decline was due to a combination of factors. The company was now adding subscribers from the strata with low minutes of usage. Also, there was some element of seasonality with some months not good for growth.

Idea has announced a Capex of Rs 9,000 crore to be spent this-and-the-next fiscal in building network capacity in existing circles. It is operating in 13 service areas.

On the spectrum issue, Aga said it was disappointing that the law of the land was not followed.

Going forward, the capacity build up will reap benefits with a lag, he added.

On the tower business, Aga said the board has approved to carve out its passive infrastructure into a wholly owned subsidiary, but there has been no decision on the future course of action.