Nepal Telecom profit growth lowest in five years

KATHMANDU, JUL 24 -

Nepal Telecom’s (NT) profit growth rate has declined in fiscal 2011-12, the lowest in five year. The NT showed a profit growth rate of 5.03 percent, down from 12.48 percent in fiscal 2010-11.

According to NT’s unaudited financial statement, it earned a profit of Rs 12.73 billion last year. In the previous fiscal year, it made a profit of Rs 12.12 billion.

Even though the state-owned company failed to distribute new telecom service lines as projected in the last fiscal year, the income recorded is higher than the target. According to NT officials, the total income of the company stands at around Rs 33 billion. It added one million plus new subscribers.

NT had aimed at earning Rs 31.09 billion and adding 1.65 million new users of GSM mobile, CDMA and fixed line phones. NT officials said that they had not been able to distribute lines as anticipated despite demand for NT mobile lines. “Competition with private sector operators and a decline in subscription charges and service tariff are some of the reasons behind the sluggish growth in profits,” said NT Spokesperson Surendra Prasad Thike. He added that the average revenue per user (ARPU) had been decreasing, despite the rise in number of telecom service users. NT slashed charges for CDMA sky phone, data service and mobile calls during the last fiscal year. Similarly, it had reduced international call charges to compete with private operators Ncell and United Telecom Limited. Ncell, the first private sector mobile operator, has become the number one operator in the country in terms of subscriber base by dislodging NT from the top spot.

Source: The Kathmandu Post