Idea Cellular on Saturday said it had incurred a net loss of Rs 327.70 crore during the March quarter, its second consecutive loss since. The telecom operator had reported a loss of Rs 384 crore in the December quarter, while it said it had made a profit of Rs 451.70 crore during the same quarter the previous year, Reuters reported.
Analysts said freebies by Reliance Jio, which entered the telecom sector in September 2016, had prevented India’s third-largest telecom operator from raking in the profits. The Aditya Birla Group’s firm said its loss compared to a net profit of about Rs 452 crore a year ago.
Reliance’s Jio’s entry is also believed to have reduced the country’s top telecom operator Bharti Airtel’s profits to its lowest in more than four years.
“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,” Idea said. The carrier was forced to cut voice tariffs by 12.5% and slash its data prices by 27.6% in the December quarter.
Idea and Vodafone Group Plc’s Indian affiliate have agreed to a $23-billion (around Rs 1.47 lakh crore) merger to create India’s largest telecom network, while Airtel will absorb Telenor’s operations in six Indian states.
Earlier, Airtel, Vodafone India and Idea had alleged that Jio had been offering free services since December 2015, when it was testing its networks. In February this year, Airtel had moved the Competition Commission of India against Jio’s “predatory free pricing strategy”.
Soon after its September 1 launch, Jio had started claiming that its rival telecom companies had not provided the required interconnection points, which had been causing a large number of call drops.