Telecom Sector’s Profits Repatriation Drop by 30 % in Q1 FY 2012

Telecom and broadband operators have sustained a financially-tight quarter as their earnings sent to headquarters were seen dropping by 30 percent in Jul-Sept 2011 as compared to same duration last year, State Bank of Pakistan data showed.

The profit dividends of the telecom and broadband operators stood at US $ 34.6 million in the first quarter of the financial year 2011-12, which showed negative growth compared with US $49.8 million of the earning repatriation posted during the same period previous financial year.

According to the data, US $ 30.9 million profits were sent by cellular and telecom operators such as Mobilink, Zong, Warid Tel, Qubee, Wi-Tribe and etc., as operations and services earnings

Whereas US $ 3.7 million earning repatriated abroad by listed companies in stock exchanges such as Wateen, PTCL and TRG through portfolio profits.

Analysts said that services’ sales of telecom and broadband operators were witnessed quite low in the first quarter of financial year 2011-12 on decreased consumptions of the subscribers in the country.

During the period, the heavy rains across the country particularly in the Sindh affected the services consumption and infrastructure of the telecom sector that impacted negatively on the earnings of the telecom operators.

They said that seasonal drop of services witnessed in the month of Ramadan as customers’ activities were traditionally low in the country despite introduction of enhanced services packages particularly by cellular and broadband operators.

In Ramadan, the commercial and domestic consumption of telephony and broadband services witnessed decline of 15 to 20 percent compared with other months of the year. The subscriptions growth of different operators was also seen slowing down because of shifted priorities of masses in Ramadan.

Moreover, the stock exchanges were remained volatile in the first quarter of 2011-12 with mix trend of share trading particularly in the companies of telecommunication sector. Hence, it affected the earnings of the listed companies in the period under-review.