Orascom Telecom has announced that its net profit for the first half fell about 30% as income was affected by unrealized foreign exchange losses and losses in Pakistan.
Group statement said that revenues for Mobilink decreased by 21% in US dollars, while decrement of 2 percent in local currency.
OT reported a net profit of $184 million in the first half. Its subscribers reached 84 million, up 8.7% from the same period in 2008.
Group said that its net revenue stood at $2,478 million, demonstrating a decrement of 2.3%.
Chairman Naguib Sawiris said in the statement that the economic environment was still challenging but the firm could meet its growth targets.
“The first half of 2009 was characterized by a weak first quarter followed by a stronger second quarter; nevertheless the economic environment in which we are operating is still challenging and we see only timid signals of economic growth returning. In this context we are satisfied that our performance to date this year is in line with our forecasts, which predict a slower growth than in the same period of 2008,” Sawiris said.
Mobilink’s Performance
As mentioned above, Mobilink saw decreased revenues in US dollars, as well in local currency. Moreover, capex decreased by 83 percent – depicting negative trend in network expansion.
If we see below table, huge decrement in customer base helped Mobilink retain its ARPU level, which could have been lower in case of lesser churn rate which stood at 5.1 percent (for period of three months).
After significant decline in customer base (both in prepaid and postpaid), company is gaining some volume with time. Mobilink has 504,717 postpaid customers against 28,632,122 prepaid customers.
Orascom’s Data
good work ! such detailed articles are an excellent source of comprehensive information.
But the headline is a bit misleading, indicating that mobilink’s revenue has fallen significantly.Foreing exchange fluctuations dont reflect the change in revenues in PKR.In the real pakistani scenario where mobilink actually operates the revenues have only fallen by 1.8% which is nothing compared to the hue and cry raised by all the cellular operators of inflation and taxes cutting their revenues.Most importantly,ARPU has actually increased which is what indicates company profitably even if a few subscribers were lost to churn.
Could someone also provide figures of Telenor’s postpaid segment like provided in this piece about Indigo’s subscriber base.
Anyways,nice work done.
https://propakistani.pk/wp-content/uploads/2009/07/Telenor_Pakistan_Q2_2009_Traffic_Subscribers.jpg
exactly!! the decline in profits is nt due to decline in per customer revenue or high taxes rather it is due to the declining trend of pak rupee against american dollar
These poor results were expected because of pathetic marketing by Mobilink. It wouldn’t be suprising if OT decides to sell off Mobilink if results for 2nd half are worse. Investors don’t want margins below 30%. Get out before profitability drops.
can u tell me what r the other reasons of decline of mobilink?
one of the major reason of decline is upper management weak policies.one of the example is mobilink is upgrading system but at cs no intimation plan updated therefore customer care is damaging as no confirm resolution answer is available to customer queries. one of the major problem is dada giri at upper management exist which is keeping vague situation,and avoiding any documented update.and everyone is saing in mobilink -who cares. God bless .
The customer care in recent days is so poor, wich may also be the cause of this fact.
As far as the customer support of Mobilink is concerned; it is empirical that the standard of services has fallen in a great deal. Might be this could be one of the reasons of declining in Mobilink revenues.