Idea Cellular likely to widen net loss to Rs 1,292 crore in December quarter

In the month of September, the Telecom Regulatory Authority of India (TRAI) has cut interconnection usage charges (IUC) levied by telecom firms by 57 percent, adding that termination rates will be abolished in early 2020.

“December quarter is likely to be another weak quarter for the Indian wireless names. A 57 percent cut in mobile termination rate (MTR), effective Oct 1, 2017, is likely to impact Bharti’s and Idea’s India wireless EBITDA by around 8 percent and 11 percent (on 2QFY18 base) respectively,” Kotak Institutional Equities said in a note.

The earnings before interest tax depreciation and amortization is expected to fall by 18 percent sequentially to Rs 1,221 crore for the December quarter compared to Rs 1,501 crore reported in the September quarter.

“As Idea rolls out cheap bundled plans to retain subscribers expect voice and data realizations to plummet. EBITDA margin is expected to fall which would swell net loss,” said the poll.

The operating margins is also likely to contract to 18.7 percent compared to 20 percent recorded in the previous quarter, according to CNBC-TV18 estimates.

Deal Status: 

1) Idea and Vodafone to sell their shareholding in the tower business to ATC Telecom Infra for a combined EV of Rs 7,850 crore

2) Idea to get Rs 4,000 crore post completion of deal

3) The average tower cost works out Rs 36 lakh vs Rs 50 lakh (SREI sold Viom)

4) The towers business contributed 0.8 percent to Idea’s consolidated revenue

5) To Be Completed By First Half Of 2018

6) Idea’s Current debt at Rs 55,984 crore