Pandemic, odds with regulator put GP in de-growth

The destructive weight of the Covid-19 pandemic coupled with a cold relationship with the telecom regulator contracted the revenue of the country's largest mobile phone service provider Grameenphone by more than 8 percent in the second quarter of this year. 

The company has reported negative growth both in revenue and in number of subscribers. 

After the first half of the year, the investment in network expansion has decreased by 63.29 percent compared to the investment in the same time in the previous year. 

In the last six months, the service provider invested only Tk290 crore, way down from Tk790 crore in the same period of 2019.

The service provider reported a total revenue of Tk3,310 crore for the second quarter of 2020, registering an 8.2 percent de-growth from the same period last year.

Net profit after taxes for the second quarter was Tk730 crore, with a 22 percent margin. Earnings per share (EPS) for the period stood at Tk5.38. 

The service provider reported 74.5 million total customers, of which 54.8 percent, or 40.8 million, are internet customers. 

Grameenphone lost two million subscribers during the first half, of which 0.8 million subscribers left the fleet solely in the second quarter of 2020, the company said in a press release on Wednesday. 

However, the Bangladesh Telecommunication Regulatory Commission (BTRC) data shows that the service provider lost around 2.20 million subscribers in the last five months. 

Financial results of the first half reflect a business calamity that the country's biggest operator has been facing. 

From July 01, the regulator has imposed two new restrictions on Grameenphone, declaring it a significant market power (SMP) service provider. 

In July last year, BTRC stopped Grameenphone from making new investments – in a move to realise its disputed audit claims from the company. From then, the service provider was unable to expand its networks till February this year. 

These issues thwarted the service provider's quality of services and have had an impact on the business. 

Grameenphone also said the drop in revenue and the number of subscribers is a combine aftermath of challenges that appeared both from the nature and the regulatory end. 

"For the past four months, we have been experiencing the impact of an unprecedented global pandemic which has driven us to drastically change our way of work and how we serve our customers," said Yasir Azman, chief executive officer of Grameenphone. 

"In addition to Covid-19, we have experienced an impact from challenging weather and regulatory scenario, all of which combined has driven us to degrowth in our performance compared to last year," he added. 

During the second quarter, Grameenphone invested Tk250 crore in network coverage, adding 132 new 4G sites to its network, and the total investment in the first half of the year was Tk290 crore 

"The second quarter of 2020 has been challenging for Grameenphone as we experienced an overall slow-down of economy due to the general holidays which started to gradually recover from May," said Jens Becker, chief financial officer of the company.

"We experienced de-growth in subscription and traffic revenues, even though data revenue stayed on track. Our commitment remains to investing in the country and using our technology expertise to aid the government in battling Covid-19." 

"We are pleased to announce that the Grameenphone Board of Directors declared interim dividend at the rate of 130 percent of the paid-up capital," he added.

The company has paid Tk4,640 crore, equaling 67 percent of its total revenues, to the national exchequer in the form of taxes, VAT, duties, fees, 4G license and spectrum assignment, said the press release.