Idea Cellular Q1 net profit at Rs 297 cr

MUMBAI, INIDA: Despite a stiff competition in the pricing front, India's fifth-largest mobile operator Idea Cellular reported a consolidated net profit of Rs. 297.06 crore for the quarter ended June 30 against Rs. 263.09 crore in the same quarter last fiscal.

The market estimates had forecast that Idea’s net profit would be to the tune of Rs. 280 crore owing to the rapid rollout in new circles and its merger with Spice.

The total income of the company rose to Rs. 2,975.90 crore during the June quarter, from Rs. 2,178.07 crore in the year-ago quarter. However, the company said its revenues have contracted by Rs. 142 crore due to reduction in termination call charges from 30 paise to 20 paise.

On a standalone basis, Idea reported a net profit of Rs. 309.21 crore for Q1. The Aditya Birla group company added 4.1 million mobile users in the June quarter, taking its customer base to 47.1 million.

“Next few quarters will be good for us because the strength of Idea will become more manifest,” said Idea MD Sanjeev Aga. He said there is an inevitable period of loss-making before the company breaks even in new circles.

Idea's chief financial officer Akshaya Moondra said that the company is securing up to 60 billion rupees ($1.2 billion) which should cover its funding needs until the end of March 2011.

The funds would be used on expanding Idea's operations, including its new service areas in the eastern state of West Bengal and other circles in the country's northeast.

"We are in the process of tying up these funds. This should look after our funding requirements for this year and the next," said Moondra. The funds were being raised from export credit agencies in Finland and Sweden, he said, adding the company already had approval from its lenders to raise 95 billion rupees.

"We are adequately funded as of now," he said.

Moondra said there were plans to eventually list telecom tower company Indus Towers, in which Idea's unit, Aditya Birla Telecom, holds 16 percent, although it was not expected to happen until the second half of calendar year 2010.

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