Idea Cellular reports first-ever loss as telco price war rages in India
Published: 2017-02-12 04:25:38.0 BdST Updated: 2017-02-12 04:25:38.0 BdST
Idea Cellular Ltd, India's third-biggest telecommunications operator, reported its first quarterly loss after a new rival forced carriers to cut prices in the highly competitive market.
Reliance Jio Infocomm Ltd, controlled by India's richest man, Mukesh Ambani, opened for business in September and has shaken the Indian telecoms market with its free voice and cut-price data plans spurring a flurry of similar offers from incumbents led by Bharti Airtel Ltd.
That has increased costs, eroded margins and even forced Vodafone Group Plc's Indian unit to talk to Idea about combining their businesses, potentially creating the market's biggest carrier.
Idea, part of the Aditya Birla Conglomerate, on Saturday said it had a consolidated net loss of 3.84 billion rupees ($57.47 million) in its fiscal third quarter ended Dec. 31, compared with a net profit of 6.59 billion a year earlier.
The loss was slightly bigger than analysts' expectations of 3.71 billion rupees, according to Thomson Reuters data.
The core telecom operations loss, without including its stake in a telecom tower joint venture, was even higher at 4.79 billion rupees on a standalone basis, Idea said, and was the first-ever quarterly loss since June 2006, Thomson Reuters data.
Idea said in a statement it cut mobile voice rates by 10.6 percent and data prices by about 15 percent in the December quarter to retain its customers.
Revenue declined 3.8 percent from a year earlier to 86.63 billion rupees in the December quarter, while expenditure rose 10.3 percent to 84.63 billion, Idea said.
Smaller rival Reliance Communications also reported on Saturday a consolidated net loss of 5.31 billion rupees for the third quarter ended December. It also blamed competition among other factors for the loss.
Bharti Airtel, the top Indian telecommunication carrier, reported its lowest quarterly profit for four years last month, hit by the price war.
($1 = 66.8131 rupees)
Any unauthorised use or reproduction of bdnews24.com content for commercial purposes is strictly prohibited and constitutes copyright infringement liable to legal action.
- Bangladesh seeks Canadian support in its journey towards a middle-income country
- Textile imports: New resolution pushing for EU rules to curb worker exploitation
- Mobile operators asked to publicly clarify internet data price in two days
- BIDA signs MoU for $2 billion Chinese investment in construction sector
- India-owned BHEL gets $1.5 billion order to build Rampal Power Plant
- China to invest $2 billion in Bangladesh construction materials sector
- IT firms call for higher limits on dollar purchases
- Four years into Rana Plaza tragedy, Netherlands finds Bangladesh RMG sector ‘safer’
- Chevron announces sale of Bangladesh operations
- Rangs chief Rouf, HRC Chairman Sayeed cleared of 1996 share fraud
- 'Operation Eagle Hunt' on: Final appeal to militants to surrender
- Hillary Clinton’s aides threatened me with tax audit: Sajeeb Wazed Joy
- Commerce Minister Tofail hints at 'conspiracy' behind Dollar gaining against Taka
- Cameron ‘proud’ of Bangladesh, says ‘sorry’ for not visiting as prime minister
- Housewife bites off alleged rapist's tongue in Feni
- Bangladesh directors to boycott actor Shakib Khan
- Hot, humid weather may continue for two more days, says Met office
- Actor Vinod Khanna dies at 70 from cancer
- Unite to fight against violent ideology of terrorism, ex-PM Cameron says from Dhaka
- Five-year-old Sumaiya speaks about her 'abduction'