* Net profit 4.68 bln rupees vs 5.13 bln rupees estimates
* Lower competition helping Indian carriers
* Spectrum bids a risk if funded with debt
(Adds company comments, details)
By Devidutta Tripathy and Prashant Mehra
NEW DELHI/MUMBAI, Jan 27 Idea Cellular Ltd's
quarterly net profit doubled as it benefited from
reduced competition and an increase in voice call prices in the
world's second-biggest mobile phone market, but missed analysts'
India's No.3 cellular carrier by revenue and customers
reported that consolidated net profit surged to 4.68 billion
rupees ($75 million) for its fiscal third quarter ended
December, it said on Monday.
Analysts had on average expected Idea to report a net profit
of 5.13 billion rupees, according to data compiled by Thomson
"The voice market continues to do well," Managing Director
Himanshu Kapania said at a news conference after the results.
He said there was high competition in mobile data, resulting
in lower margins from the segment. Carriers in India get more
than 80 percent of revenue from the voice market, but mobile
data services are growing faster as 3G networks expand.
Leading carriers including Bharti Airtel, Vodafone
India and Idea last year raised voice call prices after
a years-long price war and continue to cut discounts after a
court order forced some smaller companies to shut down or scale
back, helping reduce competition.
Idea, part of the Aditya Birla conglomerate, is favoured by
some investors because of its focus on mobile services and the
domestic market and it has lower debt compared with its rivals.
But it faces a tough challenge from Bharti and Vodafone India,
which are much bigger by revenue.
Idea, which is about a fifth-owned by Malaysia's Axiata
, has applied to bid in a mobile phone spectrum auction
starting Feb. 3 and is expected to buy airwaves to roll out 3G
services in areas where it does not have the capability.
High spending in the spectrum auction, which has seen
interest from eight companies including the leading mobile
carriers and cash-rich conglomerate Reliance Industries
, is a risk for the carriers who will most likely fund
it by taking more debt.
Idea, the first telecom carrier to report results for the
December quarter, said revenue for the quarter rose 19 percent
to 66.13 billion rupees, in line with estimates. Analysts on
average had expected revenue of 66.1 billion rupees.
Average revenue per user, a key operating metric for phone
carriers, rose 3 percent from the previous quarter to 169
rupees, said Idea, which had 129 million customers as of
December. Average realisation per minute grew to 0.449 rupees
from 0.447 rupees a quarter earlier.
Shares in Idea, valued at about $8 billion, closed 5 percent
lower ahead of the results, against a 2 percent fall in the
broader NSE index. Both Idea and Bharti Airtel have
underperformed the broader market this month, due to worries of
fierce bidding in the mobile phone spectrum auction.
($1 = 62.4900 Indian rupees)
(Editing Matt Driskill and Pravin Char)