Telecom companies can no longer afford to ignore widespread cost increases. To depart from a business-as-usual approach, bold steps must be taken to enhance revenue growth as inflation and grim yearly estimates eat up profits.
In a pretty straightforward message to company employees, CEO Jazz Aamir Ibrahim said 2023 explained how the weakening of the rupee against the dollar made operations more expensive and that cost-cutting will no longer be enough. He said, “We must grow ourselves out of the current problems and today, I want to talk about a mindset change – Accelerated Topline Growth”.
Aamir said, “I am both proud and grateful for your contribution to helping execute our Digital Operator 1440 strategy. However, 2023 has started with a rather unfavorable macroeconomic situation”.
“The weakening of PKR vs USD makes our equipment more expensive whilst, the rising interest costs make the financing of this equipment twice as expensive. While I have in the past talked about telecom emergencies, a new reality dawns upon us that cutting costs will no longer be enough to get us out of this situation. We must grow ourselves out of the current problems and today, I want to talk about a mindset change – Accelerated Topline Growth,” he explained.
Aamir noted that the company had to commit to growing the revenue of every single line item by at least 30 percent. “Whilst, Pakistan has impressively grown the subscriber numbers to 193 million, the fact remains that our industry Average Revenue Per User (ARPU) is Rs. 220 (or 75 cents – the lowest in the world), the cost of production of a gigabyte (GB) of data is much higher than its selling price. We cannot serve the customers at these prices anymore,” he said.
The top Jazz executive said unless the operator shifted the ARPU back to USD 1.50 (2020 levels) within the next 12 months, it will fail in helping build ‘Digital Pakistan’. “This means we must think of our revenue in dollar terms, and this can only be achieved via disciplined inflationary pricing. Simply speaking, this means our prices will have to go up whenever the price of fuel, electricity, interest rate, or dollar goes up. The opportunity for digital growth remains huge; however, it will remain a missed opportunity unless we do not shift gears,” he stated.
Aamir was confident that his employees were capable of achieving the aforesaid target. “Let’s continue to push forward and embrace this growth mindset, so we continue to maintain our position as Pakistan’s Number 1 Digital Operator,” he concluded.
