Idea Cellular reported 18.4% dip in net profit on a yearly comparison for the quarter ended September 2010 with the company attributing the fall to wage hikes and higher depreciation costs.

Net profit for the second quarter was Rs 179.9 crore, down from Rs 202 crore a year ago. Revenue in the period rose 23% to Rs 3,659 crore which is seen as almost flat on a sequential comparison.

Average revenue per user dropped to Rs 167 from Rs 182 in the earlier quarter and average revenue per minute to Rs 0.42 from Rs 0.44. Minutes used per subscriber monthly had been on the rise for the past year. In the just-ended quarter it dropped to 394 from 415. The October-December quarter would be better as the festival season boosts cell phone usage, said the company.

The company plans to spend Rs 4,000 crore on capital expenses in FY11, said Sanjeev Aga, company’s MD. The company had earlier said it would be in the range of Rs 4,000-4,400 crore.

He also said that starting from the day of Idea’s 3G launch the company would spend around Rs 3,000 crore over a year on equipment for 3G services. However, it is not going to offset the falling revenue per subscriber. “3G is not an intervention for margins. It is not a panacea for profitability.”

Idea Cellular will launch 3G services at the end of December or January, he said. By then, the company would have finalised tie-ups with players who have spectrum in those areas where it has not received any. This would ensure Idea’s 3G services are available to its customers across the country, he said.