Idea Cellular Ltd, India’s third-biggest telecoms operator, posted its second straight quarterly loss after a rival carrier’s free services hit sales and eroded margins.The free offerings of Reliance Industries’ telecoms venture Jio, which started operations late last year, have sparked a fierce price war in the world’s second biggest mobile phone market, forcing rivals such as Idea to launch cheap service plans.
That has impacted revenues and profitability across the uber-competitive telecoms sector.
Idea, part of the Aditya Birla conglomerate, on Saturday said it made a consolidated net loss of about 3.28 billion rupees ($51.06 million) in the three months to March 31, compared with a net profit of about 4.52 billion rupees a year ago.Analysts had, on average, expected the wireless carrier to post a loss of 7.14 billion rupees, according to Thomson Reuters data.
The group’s net loss from its core telecom operations, which does not include its stake in a telecom tower joint venture, was even higher at 4.3 billion rupees on a standalone basis.
“With the new entrant starting to charge for its services, albeit very slowly, the sector is expected to return to growth in the next financial year,” the company said in a statement.
Vodafone Group Plc’s Indian subsidiary and Idea have agreed a $23 billion merger that will create the market’s biggest carrier while Bharti has taken over Norwegian Telenor’s operations in six Indian states.
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