Telenor’s latest earning report said that the company’s ARPU (Average Revenue Per User) for both prepaid and post customers declined during 2016 when compared to last year due to increased data usage.
The company’s ARPU by the end of 2016 stood at Rs. 205 per user per month, down from Rs. 212 per user per month a year ago.
This potentially translates into an equation which will mean that increased investments in 3G / 4G networks are ultimately going to hurt telecom operators. “Sadly, this could be the case if operator’s don’t stop their ongoing price wars and battles”, said an analyst who wanted to remain unnamed.
Not to mention, Telenor invested $395 million for 4G spectrum in August 2016 and has been spending money for last two years to stretch its 3G and 4G footprint.
“You need to be worried when telecom consumer’s average spending per month on telecom services is not more than four cups of tea”, said a high-up of telecom company while speaking with ProPakistani yesterday.
He pointed out that telecom revenues are on a decline for last two years despite network upgradation worth several hundred million dollars and other valuable offerings.
This calls for actionable measures from operators to deal with the situation before it’s too late. We are hearing that their headquarters are already rejecting — or the very least, not encouraging — any new investment plans.
Its time that telecom operators start thinking of things beyond number of subscribers and start offering quality and more sustainable services that could grow their business, not just the subscribers.
Telenor Q4 2016 Highlights:
- Number of subscribers grew 14% (as compared to previous year) that resulted into 12% increase in revenues
- EBITDA decreased by 4%
- Capital expenditure increased due to 3G and 4G network roll-out, following the acquisition of new 4G spectrum earlier in 2016
More in below table: