GP’s revenue, profit drop in Jan-Mar quarter

Grameenphone, the top telecom operator in the country, registered Tk3,481 crore in revenue during the January-March quarter of this year, which was 3.75% lower than that over the same periodlast year.

On top of that, mainly due to the non-recurrence of a large one-off exchange rate gain in the first quarter of 2020 and also an increase in tax expenses brought the listed multinational company's quarterly profit down by 16.7% to Tk890.6 crore, which was also lower than the preceding quarter's net profit of Tk1,030 crore.

The company mainly blamed this on economic uncertainties caused by Covid-19 that began impacting business after the first quarter of 2020 and is yet to go.

Responding to The Business Standard queries, Grameenphone's external communication officials said the curtailed local call termination rate, which came into effect in mid-July last year only for their company, had impacted their revenue.

But analysts dug deeper.A telecom analyst at a top equity research team told The Business Standard on Tuesday the 17.53% year-on-year decline in interconnect revenues makes sense since Grameenphone as a significant market player (SMP) is getting 40% less revenue than its competitors against each incoming call from other operators.

Since he is not authorised to talk to the media, the analyst requested anonymity and said, "The companyregistered over 6% quarter-on-quarter growth in interconnect revenues.But such revenues are not a big deal as they do not account for even 5% of the total revenue."

His concern is that Grameenphone's revenue from its own subscriber base declined in the first quarter of this year compared to both the preceding quarter and the same quarter a year ago.

"It is mainly due to competition," he said as Grameenphone's main competitor RobiAxiata posted 3.2% quarter-on-quarter growth and 1.7% year-on-year growth for the January-March quarter this year.

"Data revenue is the decisive factor in competition nowadays," the analyst said, adding, "In the face of the rising popularity of free internet-based calls, the entire telecom industry is facing a gradual decline in voice call revenues while data is contributing more to the companies' total revenues."

Robi too faced a decline in voice call revenues in the first quarter of 2021 but secured 8.5% quarter-on-quarter growth and 16.3% year-on-year growth in data revenue.

On the other hand, Grameenphone absorbed 4.4% drop in total data revenue and 6.8% drop in average data revenue per user in the first quarter of 2021 compared to the same quarter last year, despite the fact that the market leader added 7.2% more subscribers to its total subscriber base and 3.4% to the active data user base.

Data revenue contributed 23.8% of Grameenphone's total revenue from services in last quarter.

Another analyst at a local asset management firm observed that Grameenphone had been in need of data capacity expansion in recent years to play the industry game well, but it suffered hurdles due to regulatory issues, such as the failure to get no-objection certificatesfrom the telecommunication regulator, mainly in the last two years.

When its competitors aggressively reduced data price, Grameenphone had to stay aside since it did not have sufficient unutilised data capacities, said the analyst.

Grameenphone moderately responded to the industry trend at the latter part of 2020 through slightly reducing data price, but that was not enough to get the net data revenue improved, he said.

He also sought anonymity since he is not authorised to share views in public.

Grameenphone later got the regulatory issues resolved.It has already obtained some no-objection certificates from Bangladesh Telecommunication Regulatory Commission to increase capacity.It also acquired the much-needed spectrum in the last auction, and both analysts feel Grameenphone can be aggressive in the data revenue game in the coming days.

Grameenphone Chief Executive Officer YasirAzman said in a press statement on Tuesday that several significant milestones had been achieved in the first three months of 2021.

With the recent acquisition of 10.4MHz spectrum, Grameenphone now holds 47.4MHz, he informed, adding that the company rolled out 1,510 4G sites in last quarter and is operating with the country's widest network comprising 15,590 4G-enabled base stations.

"With the focus on our strengths in market execution, innovation, driving simplification, and bringing convenience to customers, we are committed to using our technology expertise in building capabilities and digital enablement," said Yasir.