Topline at Rs36.9bn (+5% QoQ adj for Spice) was ahead, despite a higher-than-expected fall in rev/min, on strong traffic growth (13% QoQ). EBITDA at Rs7.9bn (-5%) however came in slightly below as margins fell 260bps due to 1) full-quarter consolidation of Spice, 2) diesel price hike (20bps) and 3) higher spectrum charges. Losses in the new circles were contained at Rs1.4bn (flat QoQ). PAT came in at Rs1.9bn.
Standalone Idea (ex-Spice) grew a strong 13% QoQ on the back of 13.5% in 4Q indicating 1) leakage of mins to new entrants has reduced considerably in incumbent circles, post tariff cuts in Oct-Nov-09 and 2) some benefit of elasticity from lower rev/min. Idea’s weaker/new circles however, similar to the other new entrants, would have been hit too by tariff retaliation by incumbents, as is indicated by the lackluster 3% mins growth in Karnataka/Punjab (Spice circles). This is also witnessed with pre-paid churn remaining high at 8.4% (7.9% in 4Q).
Standalone net debt jumped to Rs96.6bn post 3G with Net debt/EBITDA at 3.0x. Capex guidance has also been increased to ~Rs42bn (Rs30bn) to include 3G
