Mumbai, April 26: Idea Cellular ' the third largest wireless operator by revenue ' today disappointed by posting a 13 per cent drop in net profit for the fourth quarter ended March 31 as higher interest costs weighed. The AV Birla group company recorded a net profit of Rs 239 crore against Rs 274.5 crore in the corresponding period of the last fiscal.
Analysts had expected the company to post net profits of around Rs 260 crore.
Idea Cellular attributed the slide in net profit to higher depreciation and interest charges because of front-loaded 3G investments. While depreciation rose to Rs 784.4 crore (Rs 657.2 crore), interest and financing cost jumped to Rs 227.5 crore from Rs 85.4 crore in the same period last year.
However, the company pointed out that operationally it fared well during the quarter and this was reflected by the growth in voice minutes by over 9 per cent to 124 billion minutes compared with 114 billion minutes in the preceding quarter.
However, the rise in average realisation per minute (ARPM) was halted with a decline in ARPM to 42.2 paise from 43.3 paise because of the tough competition in the cellular market. The firm is now concentrating on improving its non-voice revenue, which contributed 14.3 per cent to revenues in the fourth quarter against 13.7 per cent in the preceding three months.
During the fourth quarter, the company had a subscriber base of 11.27 crore (8.95 crore) with prepaid users forming nearly 97 per cent of the total subscribers. The average minutes of use per user, however, showed a marginal fall compared with the corresponding period of 2010-11.
The fourth quarter showed a rise in Idea Cellular's gross revenues, which stood at Rs 5,369.7 crore (Rs 4,234.7 crore).
Its results come at a time the telecom regulator had recommended a very high reserve price for 2G spectrum, which if implemented could impact Idea Cellular as well.