Idea Cellular feels the pinch of steep competition; reports lower sales growth and wider loss in new circles

MUMBAI: Telecom operator Idea Cellular reported a significant deceleration in the sequential revenue growth for the June 2012 quarter due to lower revenue per minute on its network. The company expects the pressure on topline and profitability to continue in the next quarter as well owing to intense competition.

Idea’s revenue rose by just over 2.5% to Rs 5504 crore sequentially in the June 2012 quarter. It slid from the 6-9% seen in the prior two quarters. Growth in profits also came down sharply as the company failed to retain the stability in per minute revenue (ARPM) and per user revenue (ARPU). After a remarkable recovery in the previous two quarters, ARPM fell sequentially by 2.4% in the June quarter to 41.2 paise. ARPU dropped by 2.5% to 156 rupees.

Another concern is rising operating loss in its new circles. After containing it in the December and the March quarters of FY12, the company has once again reported wider losses from its operations in the nine new areas. The loss increased toRs 1,687 crore in the June quarter from Rs 1,601 crore in the prior quarter. Considering the pressure on the company’s subscriber parameters, the loss may cross the level of Rs 1,700 crore seen two quarters ago.