New Delhi, India, April 28, 2015: Due to the changes in the TRAI Interconnect (IUC) regulations (Amendmend XIth and XIIth) effective March 01, 2015, the results for this quarter and financial year 2014-15 are not comparable to earlier quarters & financial years. The gross revenue both for the quarter Q4FY15 and for FY15 is negatively impacted by ~Rs. 1050 million, though the impact on EBITDA is minimal.
Idea continues its enviable track record of being amongst the fastest growing large Indian Mobile operators with 19.1% growth in gross revenue in FY15 at Rs. 3,15,548 million, nearly 1.8 times the wireless industry revenue growth rate (CY14). Inspite of TRAI reducing the Termination Charge from earlier 20p/minute to 14p/minute from other telecom operators (and no IUC charge on the calls originating or terminating to Wireline networks), the sequential quarterly revenue has grown by 5% in Q4FY15 (normalized QoQ revenue growth of 6.3%) driven by a) 9.2 million Active Subscriber addition (VLR Adds), b) sharp expansion of voice minutes @8.4% to 185 billion minutes and c) 18.3% Mobile data volume (2G+3G) growth to 54.5 billion Megabytes v/s Q3FY15; a clear testimony of strong consumer demand for Idea Mobile services.
Idea has clocked 23.5 million net VLR subscriber addition in FY15 against 17.7 million net VLR addition in FY14, now servicing a strong 161.4 million quality consumers across India. Competitively, the company has improved its standing with customer Market share (on VLR) @ 18.6% (Feb’15) and ‘Revenue Market Share’ (RMS) @17.5% in Q3FY15, an RMS improvement of over 1.4% compared to Q3FY14. Inspite of large subscriber additions, the quality of Idea overall consumer base improved its ARPU to Rs. 179 (v/s Rs. 173 in Q4FY14) and Voice usage per subscriber increased to 400 minutes ( v/s 397 in Q4FY14).
The voice rate realisation remained under pressure for the third successive quarter; fell sharply by 7.1% to 33.9p/minute from 36.5p/minute (Q4FY14) but the elasticity of demand compensated rate decline with 16.3% minute growth in FY15 v/s FY14. Additionally, faster Mobile data growth compensated the voice rate decline and consequently the ‘Average Realisation Per Minute’ (ARPM) improved by 2.7% to 44.8p/minute in Q4FY15 from 43.6p/minute (Q4FY14) and ‘Non Voice’ Revenue share increased to 24.5% this quarter (16.5% in Q4FY14).
Idea further revised Mobile Data Subscriber definition, eliminating from its reporting all incidental data users of less than 10 Megabytes/Month. The Mobile data user (2G+3G) penetration in overall base is now 21.2% at 33.4 million data subscribers with blended Mobile data ARPU (2G+3G) at Rs. 150 in Q4FY15 (v/s Rs. 104 in Q4FY14). The data ‘Average Realisation Per MB’ (ARMB) has remained largely flat at 25.7p/minute 25.3p/minute in Q4FY14).
The company doubled its 3G data subscriber base, adding 7.3 million new 3G users in last one year, servicing overall 14.5 million 3G data consumers. During the year, 3G Data volume exploded by nearly 2.3 times; from 13.1 billion Megabyte in Q4FY14 to 30.7 billion Megabyte in Q4FY15. To support the exponential Voice and Mobile Data growth, Idea capex spend for FY15 is Rs. 40.5 billion (excluding spectrum); adding 7,589 GSM sites and 8,910 3G cell sites and over 11,000 Km of high capacity optical fibre.
Inspite of higher network expansion and cost inflationary pressures, Idea standalone EBITDA grew faster in FY15 at 33% and stands at Rs. 97,679 million, helping margin improve by 3.2% to 31%. Similarly, the strong revenue growth this quarter translated into Q4FY15 standalone EBITDA margin improvement of 2.1% at 33.1% (vs Q3FY15) and sequential quarterly growth of 11.9%.
The double bottom line drivers of Voice and Data business, scale benefits and optimization of cost has helped Idea improve its standalone Profit After Tax (PAT) by 93.9% from Rs. 17,932 million (Incl. Indus dividend of Rs. 838 million) in FY14 to Rs. 34,772 million (Incl. Indus dividend of Rs. 6,250 million) this financial year. At consolidated level including Indus contribution of 16%, the company revenue in FY15 has grown by 19.1%, consolidated annual EBITDA grew by 30.4% to Rs. 108,118 million, EBITDA margin improved to 34.2% and annual PAT is at Rs. 31,929 million, an annual growth of 62.3%.
With strong performance, the board of Idea is pleased to recommend increased dividend @ 6%, an overall payment of Rs. 2,598 million (including dividend distribution tax). In the recently concluded March 2015 DoT sponsored Spectrum Auction, Idea won 79.4 MHz of spectrum, successfully ensuring continuity of services for its 107.6 million customers (68% of total customer base) in 9 service areas with licenses expiring in December 2015/April 2016, for next 20 years. Including 7 new licenses spectrum acquisition in 2012, Idea has achieved amongst the highest renewal of 16 out of total 22 Indian telecom licenses, laying solid foundation for growth of business till year 2035 (2032 for 7 licenses). Besides retention of existing efficient 900 MHz spectrum, the company has also managed to expand its 3G spectrum footprint to 13th service area; Kolkata Metro, with ability now to offer 3G services to 80% of Idea revenue base.
Additionally, the company has acquired spectrum and the ability to launch 4G services on 1800 MHz spectrum in service areas of Tamil Nadu (incl. Chennai) and Orissa, expanding Idea 4G 1800 MHz contiguous spectrum footprint to 10 service areas covering most of its strategic markets with ability to offer LTE services to 61% of Idea existing revenue. In March 2015 auction, on overall basis, Idea has won 54 MHz of efficient 900 MHz band, 20.4 MHz in 1800 MHz band and 5 MHz in 2100 MHz band, a total quantum of 79.4 MHz spectrum, across 14 circles for a total bid value of Rs. 301,375 million. The company has opted for DoT’s deferred payment option. The company has made upfront payment of Rs.77,342 million including payment of Rs. 19,350 million on March 31, 2015 and the remaining amount on April 09, 2015.
As mobility market services expand, Indian Telecom business offers exciting growth opportunities in Mobile broadband & rural voice telephony. Brand Idea with growing consumer affinity, strong cash flows, expanding 2G & 3G network footprint, competitive & multiband spectrum profile; reaffirms its ability to strengthen its market position and improve presence across new and emerging opportunities.
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