Vodafone Idea

Idea Cellular seems to have rung in a wrong number; as its Q2Fy16 was disappointing to say the least. And this is a seasonal aspect where Q2 is always weak, especially if there is a higher rural subscriber base. The company posted a consolidated revenue of Rs.8689 crore, down 1%. EBITDA was down 5% at Rs.306 crore and margins slipped from 36.7% to 35.2%. Net profit came in at Rs.809 crore, down 13% while cash profit was flat at Rs.2736 crore.

With increasing proportion of rural subscribers, the seasonal slowdown in the second quarter is more pronounced this financial year resulting in sharp contraction on sequential quarterly basis in the ‘Voice Minutes of Use’ by 3.2% to 189.5 billion compared to 195.8 billion minutes in Q1FY16. Further, due to

reductionin mobile incoming IUC charges settlement rate from 20pto 14p/min from March 01, 2015, reduction in national roaming call charges & SMS rate between 20%-75% effective from May 01, 2015 and pressure on Mobile Data realised rate as the competition intensifies in mobile broadband, the industry revenue growth rate in first six months of FY16 v/s H1FY15 is trending to low 6 -6.5% against 10.3% growth rate in H1FY15 vs H1FY14.

The company was able to contain, on sequential quarterly basis, voice rate decline to only 0.2p/minute, @ 32.7p/minute for Q2FY16 but the blended Mobile Data Average Realisation per MB (ARMB) fell by 1.2p/MB to 23.4p/MB in Q2FY16 from 24.6p/MB (Q1FY16). The Non-voice revenue contribution improved to 27.9% this quarter against 21.1% a year earlier.

The net mobile data customer base (2G+3G) has risen by 4.2 million to 41.3 million with 24.8% of overall Idea subscriber base using Idea 2G or 3G platform to access internet. While in last one year 23 million net new subscribers were added but only 10.4 million net existing Idea subscribers upgraded to Idea Mobile Data service usage.