Idea Cellular Q3 net below estimates, shares fall

Idea Cellular shares dropped 3 per cent on Wednesday after the mobile carrier reported lower than expected net profit for the fiscal third quarter. Profit rose a smaller-than-expected 14 per cent on higher network operating costs.

Idea Cellular is India's third largest mobile phone carrier by revenue and fourth-biggest by customers. Idea was India's best-performing telecom stock last year.

Idea shares traded 0.6 per cent lower at Rs 113.20 on the National Stock Exchange as of 10.50 a.m.

Idea said on Tuesday consolidated net profit rose to Rs 229 crore for its fiscal third quarter ended December 31, from Rs 201 crore a year earlier. Revenue rose an annual 11 per cent to Rs 5,579 crore.

Unlike rivals such as market leader Bharti Airtel and Reliance Communications, Idea operates only mobile phone services, not submarine cables and fixed lines, and has exposure only to the domestic market. Some analysts and investors favour Idea for its more focused approach.

Idea said its average realised rate per minute (ARPM), a key metric for telecom network operators, fell to Rs 0.411 in December quarter from Rs 0.413 in the previous quarter. Adverse currency movement led to a foreign exchange loss of Rs 13.3 crore during the quarter, it said.

Ideal Cellular is part of the Aditya Birla conglomerate and also part-owned by Malaysia's Axiata Group Bhd.

(With inputs from Reuters)