Vodafone Idea

The company posted a good set of numbers for Q4FY15. Consolidated net profit was up 23% (QoQ) at Rs.942 crore and this was on a 5% rise in revenue at Rs.8422 crore. This performance was driven by its 9.2 million Active Subscriber addition (VLR Adds), sharp expansion of voice minutes @8.4% to 185 billion minutes and 18.3% Mobile data volume (2G+3G) growth to 54.5 billion Megabytes (QoQ).

Inspite of large subscriber additions, the quality of Idea overall consumer base improved its ARPU to Rs. 179 (v/s Rs. 173 in Q4FY14) and Voice usage per subscriber increased to 400 minutes ( v/s 397 in Q4FY14). The voice rate realisation remained under pressure for the third successive quarter; fell sharply by 7.1% to 33.9p/minute from 36.5p/minute (YoY). Faster Mobile data growth compensated the voice rate decline and consequently the Average Realisation Per Minute’ (ARPM) improved by 2.7% to 44.8p/minute in Q4FY15 from 43.6p/minute (YoY) and Non Voice’ Revenue share increased to 24.5% this quarter v/s 16.5% (YoY).  The data ‘Average Realisation Per MB’ (ARMB) has remained largely flat at 25.7p/minute (25.3p/minute in Q4FY14).

In the recently concluded March 2015 DoT sponsored Spectrum Auction, Idea won 79.4 MHz of spectrum, successfully ensuring continuity of services for its 107.6 million customers (68% of total customer base) in 9 service areas with licenses expiring in December 2015/April 2016, for next 20 years. Including 7 new licenses spectrum acquisition in 2012, Idea has achieved amongst the highest renewal of 16 out of total 22 Indian telecom licenses. Additionally, the company has acquired spectrum and the ability to launch 4G services on 1800 MHz spectrum in service areas of Tamil Nadu (incl. Chennai) and Orissa.

All this came at a cost of Rs.30,137 crore. The company has opted for DoT’s deferred payment option. It has made upfront payment of Rs.7,734 crore, including payment of Rs.193 crore on March 31, 2015 and the remaining amount on April 09, 2015.

The company has said that the sector will see an impact in FY16 due to changes in the TRAI Interconnect (IUC) regulation, effective March 01, 2015, expected to be in the range of 4 to 4.5%. The capex for FY16 is at Rs.5000 to 5500 crore.