Hope to sustain subscriber growth; tap more Net users: Idea

Idea Cellular has posted a strong set of numbers in its fourth quarter ended March with the net profit rising 22.8 percent to Rs 942 crore. Its consolidated quarterly revenues rose 5.1 percent to Rs 8422.5 crore sequentially.

In an interview to CNBC-TV18, Himanshu Kapania, MD, Idea Cellular, discusses the company’s earnings and its future outlook. Below is the transcript of Himanshu Kapania's interview with Priya Sheth on CNBC-TV18. Q: What were the key drivers for the robust volume growth? A: We are pleased with Q4 results. We are reporting a sequential quarter basis revenue growth of 5 percent. In spite of an impact of Rs 105 crore because of IOC regulation change by Telecom Regulatory Authority of India (TRAI). On a year-on-year (Y-o-Y) basis, Idea is pleased to report a revenue growth of over 19 percent and this is translated into EBITDA growth of Rs 10,800 crore and absolute EBITDA growth of 33 percent and margin improvement of 2 percent on a Y-o-Y basis. The factors, which are helping us getting this robust revenue and EBITDA growth are three. Number one is subscriber growth. On a Y-o-Y basis, Idea Cellular has added 25 million additional subscribers against FY14 of 18 million subscribers. Number two is voice minutes. There was a general feeling that there is a decline in voice minutes but Idea Cellular has proven that there is sufficient and more opportunities on voice and voice minutes has grown by 16.3 percent on a Y-o-Y basis. On a quarter-on-quarter (Q-o-Q) basis, voice minutes have grown by 8.4 percent. Thirdly is obviously mobile data traffic. While the mobile data reach has declined, mobile data traffic has more than compensated for it with a growth of 18.3 percent on a sequential quarter basis and on a Y-o-Y basis, growth of 117 percent. Q: So it is kind of growth sustainable going ahead? A: Let us go step-by-step -- subscriber growth, we have had the industry which was flagging in FY14 down to about 65-67 million in the year based on last report that is available, industry has revived in subscriber growth and this year industry is reporting 71-73 million of subscriber. There are large underpenetrated markets especially in the northern and eastern belt, we remain hopeful of industry to be able to deliver the same kind of subscriber growth. Idea Cellular has in the last one year delivered one out of three new subscribers that entered the market to join Idea Cellular and we are hopeful to be able to continue this momentum on subscriber. If the subscriber growth continues, so would the minutes growth. As far as internet is concerned, only 20 percent of our existing subscribers access internet. The task is massive. Large scale investments have to be done for availability of the internet especially in mid-sized towns, small towns and rural markets and a significant amount of effort has been done in terms of our brand as well as sales and marketing. So that we can have more people attracted to join the internet bandwagon.