GrameenPhone feels the pinch

14 Feb 2008

Bangladesh’s leading cellco by customers, GrameenPhone (GP), controlled by Norway’s Telenor, has reported that its full year 2007 operating profits fell by a third year-on-year to NOK1.24 billion (USD226 million) despite revenues climbing to NOK4.62 billion compared to NOK4.31 billion in 2006. In the fourth quarter of 2007 operating profits fell to NOK292 million, down 43% on the same period a year ago. The company blamed the decline in performance on a 40% reduction in call prices, lower interconnection rates, higher marketing costs and compensation payments to the government for its role in illegal international VoIP call termination (which it paid this year alongside the country’s other main mobile network operators). During the fourth quarter its average revenue per user (ARPU) fell by 30% year-on-year. GP’s CEO Anders Jensen said: ‘In a market with falling prices, adjusting costs accordingly is very important. In the fourth quarter of 2007 we did this in an efficient manner which is reflected in the results…The outlook for the future is about continued growth and to do so we have to address the rural market in an increasingly efficient way…We have continued to make large investments in the network. With more than 10,000 base stations in over 6,000 locations around the country, the GrameenPhone network already covers more than 98% of the population.’ The GSM operator’s annual CAPEX increased by 65% to BDT35.5 billion (USD529 million). GP signed up 5.7 million new subscribers during 2007 to reach 16.48 million at the end of December, and claimed that its market share remained stable at around 48%, based on figures from the Bangladesh Telecommunications Regulatory Commission.

Bangladesh, GrameenPhone,

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