Idea Cellular reported its Quarterly results yesterday. Idea like Vodafone is stuck in just the Wireless Business. The company reported ARPU of Rs161, down 13% YoY and 4.2% QoQ and ARPM of Rs 0.41. Minutes of use per subscriber declined 0.3% YoY however the shocking thing was the increase in Monthly churn to 10.7% from ~8% in 1HFY11. VAS revenues as % of sales fell to 12% from 13% in 4Q.
Here is an excerpt from the Conference Call
- 3G services have been launched in 9 out of the 11 service areas where Idea has license with 1.55m subscribers across the700 towns. Currently the company has 3G equipments on 6500 network sites which would go up substantially as the company extends the 3G network to 3200 towns or 50% of its existing coverage.
- Idea rolled out 3G without any offers / incentives and hence all the 1.55 Mn customers are ringing cash registers of the company. 93% of the customers are in pre-paid segment. Positive on ARPU contributions because of 3G services but still too early to ascertain.
- According to the Mgmt. Data volumes in circles where 3G has been launched have increased over 80% (comparing May to February) and the bulk of the increase was due to 3G. [ Yes!!! Indians are hungry for broadband access]
- Idea is working with handset providers to bring down 3G handset costs to help users upgrade from 2G to 3G. No plans to provide handset subsidy at this stage. Management hopeful that falling price pointsof feature phones and mid-tier smartphones, they can upgrade customers to 3G in 12- 18 months
- 3G roaming agreements with few other quality operators in other circles are still under negotiations
- Idea Cellular CAPEX – This is the only Telco in India with this scale of operation guiding YoY CAPEX of $ 1 Bn.
- Idea has received several demand notice totaling Rs3,276.5MM and the same have been challenged at the TDSAT.
- Idea Cellular now has a Revenue market share of 14%
- Finally, Idea is is focussed on providing backhaul for 3G and fiberising towers. In the circlesproviding 3G, 50% of towers will be fiberised
It will be interesting to see how Idea Cellular will survive with just Wireless Voice and the expensive 3G Data Services. Any Idea ?