Idea Cellular, India’s third-largest mobile phone carrier by revenue, reported a 13 per cent fall in quarterly profit in line with estimates on higher interest costs.
Idea, part of the Aditya Birla conglomerate, said consolidated net profit fell to 2.39 billion rupees ($45.6 million) for its fiscal fourth quarter ended March, from 2.75 billion rupees reported a year earlier.
Mobile phone carriers in India, the world’s second-biggest telecoms market, have been hit by fresh regulatory uncertainty in recent months after a court order to revoke all cellular permits granted in a scandal-tainted 2008 sale.
Idea is set to lose seven of its 22 zonal operative licences when the court order becomes effective in September and must win back those permits in an auction to retain its all-India presence to compete with bigger rivals Bharti Airtel and Vodafone’s local unit.
But with the sector regulator proposing an airwaves auction with starting price of nearly 10 times the 2008 sale price, I dea will have to spend at least 25.35 billion rupees ($482 million)to win back the permits. Revenue in the quarter rose nearly 27 per cent to 53.7 billion rupees as it added more customers. Idea, with about 113 million mobile users at end-March, is India’s fourth-largest carrier by subscribers.