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Jio effect: Idea cellular posts third successive quarterly net loss

After Airtel reported massive losses, it is being followed up by Idea Cellular, which has reported yet another net loss for quarter ending June 30. This is the third successive quarterly loss being posted by Idea Cellular. Most of the loss is being attributed to the disruption being created by Reliance Jio, which has shaken up the telecom market with its free voice and dirt-cheap 4G data plans. While Jio customers are having a great time, old telecom companies are in a fix as to what to do to control their rising losses. In the Q1 2017, Idea has reported a consolidated net loss of Rs 815 crore. This is huge, since the company had earned a net profit of Rs 220.4 crore in the year-ago period. In just a year’s time, Jio has shaken up the telecom sector, resulting in massive losses for other telecom companies.

Idea’s earnings have also been affected due to rise in fiancé cost and on account of depreciation and amortization and operating costs. In a statement issued by Idea Cellular, it said, “The upheaval in the Indian wireless industry continued in Q1FY18, despite the new entrant slowly migrating from ‘Free Services’ to ‘Paid Services’ but with heavily discounted unlimited voice and data pricing plans.” The company also said that it would be launching its own VoLTE services next year to effectively compete with Jio. It will also be deploying 4G network using 2300 MHz and 2500 MHz spectrum across its prime leadership markets later this year.

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