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Idea Cellular Results Review

January 21, 2008

Idea’s 3QFY08 EBITDA at Rs5,672m was in line driven by robust revenue growth (9.3%qoq) though offset by sustained increase in network opex. Idea has started accounting pre-paid revenues net of distributor discount which explains the qoq decline in marketing costs/SAC. Adjusting for this, revenues grew 12.5%qoq. Net profit at Rs2,368m was below expectations due to higher deferred tax provision.

MOUs [Minutes of usage] which had dipped in 2Q due to inactive subs/seasonality bounced back to 377, up 5% qoq though still lower than 1QFY08. Though reported ARPUs were down 3%, the decline was negligible adjusting for the impact of the accounting change on commissions. The adjusted rev/min qoq decline at ~5% though slightly more than larger peers is broadly in line with the industry trend.

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