Idea’s net profit drops as 3G investment continues

India’s fourth largest mobile network operator by subscribers, Idea Cellular, has released its financial results for the three months ended 31 December 2011, revealing an almost 18% year-on-year decline in net profit for the period. In the cellco’s third fiscal quarter of the 2011-12 financial year it posted a consolidated net income of INR2.01 billion (USD39 million), down from INR2.43 billion a year earlier, with Idea claiming that the decline was primarily the result of higher depreciation and amortisation, along with increased interest and financing costs with regard to the investment in its in-deployment 3G network; a higher provision for deferred tax was also cited as another contributory factor for the drop in net profit. Revenues meanwhile rose against the corresponding period of 2011, with Idea reporting that consolidated turnover for the three months to end-December 2011 was INR50.31 billion, up just over 27% y-o-y, with the operator noting that the the strong revenue growth had been ‘primarily led by seasonal return of minutes growth to 114 billion, a growth of 7.3%, compared to Q2FY12.’ Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) for the three month period stood at INR13.45 billion, up from INR9.48 billion a year earlier.

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OVETEL Idea’s net profit drops as 3G investment continues