Idea Cellular has reported losses to the tune of Rs 383.87 crore for the December 2016 quarter hurt by newcomer Reliance Jio's free voice and data introductory offers.
When compared to a net profit of Rs 659.35 crore in the same period a year ago, Idea seems to be the worst hit from Jio's entry.
The Indian mobile industry witnessed an unprecedented disruption in the quarter of October to December 2016, primarily due to free voice and mobile data promotions by the new entrant in the sector.Idea Cellular statement
Idea, which is in talks with rival Vodafone for a merger, said it was "forced to reduce" its voice rates on sequential quarterly basis by 10.6 percent to 29.6 paise per minute (versus 33.1 paise in the second quarter of 2016-17) and drop in mobile data rates by 15.2 percent q-o-q to 15.9 paise per megabyte (vs 18.7 paise).
Also, Idea wasn’t pleased with the "tsunami of minutes" terminating on Idea's network from the new operator, which led to fall in voice realisation rate, something that is directly liked with Interconnection usage charges (IUC).
In terms of users on its network, Idea has overseen a fall of 5.5 million mobile data consumers. Their 2G+3G+4G customer base has gone down from 54.1 million in Q2 2016, to 48.6 million in the latest quarter.
Airtel and Vodafone have also reported fall in data usage, but owing to its quantum of users, the impact hasn’t been as bad as Idea’s. Idea is currently in merger talks with Vodafone in India and if that comes to fruition, then Vodafone and Idea’s network will surpass that of Airtel and Reliance Jio by a huge margin.
(With PTI inputs)
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