August 8, 2016 / 3:17 PM / 3 years ago

Idea Cellular posts 74 percent drop in first quarter profit

A man walks past a shop displaying Idea Cellular Ltd's logo on its shutters in Mumbai April 28, 2014. REUTERS/Danish Siddiqui/Files

MUMBAI (Reuters) - Idea Cellular, India’s third-largest telecom company, posted a 74 percent drop in its consolidated first-quarter net profit as a one-time finance cost for spectrum and lower voice revenues pushed its income down.

The company posted a net profit of 2.2 billion rupees ($32.92 million) in the three months to the end of June, missing a consensus forecast of 4.35 billion rupees, according to Thomson Reuters data.

In a statement issued on Monday, the company said one-off costs relating to the purchase of spectrum accounted for the drop in profit.

The company, which has 176 million subscribers in India, said the mobile sector continued to grow in single digits unlike last year when the sector posted a double digit growth.

Idea, along with India’s biggest telecom company Bharti Airtel Ltd and Vodafone’s India unit, have been investing heavily and slashing rates for their 3G and 4G services to retain customers as an impending launch of Reliance Industries telecom service launch expected to happen this year.

Idea said almost 1.8 million customers are now on Idea’s 4G network while Reliance has a subscriber base of 1.5 million, according to its latest annual report.

($1 = 66.8235 Indian rupees)

Reporting by Promit Mukherjee, editing by Louise Heavens

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