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MUMBAI: Idea Cellular, the country’s fifth-largest operator, reported a 34.5% year-on-year decline in second quarter net profit at Rs 144 crore as it incurred heavy expenses for launching services in new circles.

While revenues stood at Rs 2,303 crore, up over 47% year-on-year, total expenditure increased by 60% at Rs 2,000 crore during the July-September quarter. Network operating costs, the biggest component of expenditure, stood at Rs 448 crore during the reporting period.

“We are adding capacity rapidly and increasing our footprint. Business cycles will come and go, but we are committed to enhancing our long-term competitiveness for durable success,” Idea Cellular MD Sanjeev Aga told ET.

Idea, part of the Aditya Birla group, launched services in Mumbai in August this year, followed by the rollout in Bihar and Jharkhand. The decline in net profit is likely to continue later this fiscal when Idea will enter Orissa and Tamil Nadu.

Idea ended the first half of the fiscal with a subscriber base of 30.38 million, adding 6.38 million users. This has improved its national market share from 9.4% to 9.8% during the period. The Idea stock closed down at Rs 61.80 on BSE on Monday.

Idea’s average revenue per user per month declined 6% over previous quarter to Rs 261. Average minutes of use per subscriber (MOU) were down from 428 minutes in the first fiscal quarter to 417 minutes in the reporting quarter.
In the past one year, Idea has doubled its footprint from 55,655 towns and villages to 110,850.

Idea has acquired nearly 41% stake in Spice Communications and after the completion of the integration process, the telco’s footprint will extend to Punjab and Karnataka too. Source The Economic Times