NT's income growth rate slides

KATHMANDU:

The income growth rate of Nepal Telecom (NT) has declined for the second consecutive year. The third quarter (mid-July to mid-April) financial report of the company reveals that its income grew by 5.66 per cent as compared to 10.86 per cent in the same period of last fiscal .

The report made public on Tuesday shows that the state-owned telecom company earned a total of Rs 29.12 billion during the third quarter. Its net profit increased by 1.29 per cent to Rs 8.60 billion and expenditure reached Rs 17.61 billion. In the corresponding period last fiscal year, NT had posted a net profit of Rs 8.49 billion and its expenses were at Rs 16.02 billion.

In the third quarter last year, NT had earned Rs 27.56 billion, up from Rs 24.86 billion in the corresponding period of fiscal 2011-12. It is the only service provider in the country that has multiple voice and data service products. With around 8.42 million customers, NT’s major source of revenue is GSM mobile service.

In the current fiscal year, Nepal Telecom has set a target of earning Rs 41.65 billion. According to company officials, competition and multiple choices for voice and data services in the market are some reasons behind the decline in income growth rate. The heavy growth in voice penetration rate, which has reached around 90 per cent and decline in average revenue per user (ARPU) are also major reasons behind the declining income trend.

“Overall size of income has gone up, however it’s true that there has been a decline in ARPU for increased penetration rate,” said Guna Keshari Pradhan, spokesperson for NT. To gain competitive advantage over competitors, NT has been focusing on new technologies including IP CDMA, NGN, WiMax and GSM (3G, 4G) to provide customers with adequate service at affordable prices, according to the telecom company.

Besides growth in earnings and net profit, the company’s expenses under personnel costs, operation and maintenance, royalty, contribution to Rural Telecommunication Development Fund, depreciation and frequency fee have gone up, whereas expenditure on other subjects like licence fee, interest on subscribers’ deposit and administrative costs have come down.

Operation and maintenance cost grew from last fiscal’s Rs 4.08 billion to Rs 5.06 billion this year. Similarly, expense for frequency fee increased to Rs 693.86 million from Rs 362.06 million of third quarter last fiscal year.

Pradhan said that the operation cost had increased due to the ongoing network expansion work in different parts of the country. In last fiscal year 2012-13, the company had earned Rs 34.10 billion in revenue and earned a net profit of Rs 11.29 billion.

Source: THT