FE Report

GrameenPhone, the cell phone company, said its last year's fourth quarter (Q4) revenue grew slightly by 2.6 per cent to Tk 16.75 billion as it cruised along the bumpy road of global recession.

But the company's average revenue per user (ARPU) in the last quarter of 2009 whittled down from Tk 268 to Tk 244 compared to the previous quarter a year ago.

"Despite a global recession, GrameenPhone has had a good quarter in terms of subscription growth and its financial consolidation," chief executive officer, Oddvar Hesjedal, said Tuesday.

He said total revenue for this quarter also increased by 1.3 per cent from the third quarter of 2009. The company with 23 million users has attributed higher subscription base and tariff revision to this growth, compared to the same quarter the year before.

GP, 56 per cent owned by Norway's Telenor, is the country's biggest mobile phone operator. Grameen Telecom, the non-profit arm of Nobel prize-winning Grameen controls 34.2 per cent, while general retail and institutional investors the rest 10 per cent.

Telecom analysts believe the Bangladesh market is going to be far more competitive with global telecom players showing increasing interests.

GrameenPhone is also aware of the evolving trend, saying the market is facing "greater competition" as new players are coming into the market.

Last month, India's biggest mobile phone company Bharti Airtel snapped up a controlling share in the UAE's Warid Telecom with US$300 million. Japan's biggest operator NDT Do Co Mo also purchased shares of AK Khan and Company in Axiatel, formerly of AKTel.

EBITDA margin in this quarter stood at 52.6 per cent compared to 59.6 per cent of the last quarter of 2008 and 57 per cent of the Q3 of 2009 mainly due to higher costs associated with subscriber acquisition.

The sluggish ARPU was mainly due to reduced interconnection rate as defined by regulator and intake of new subscription from the financially constrained segment, the company statement said.

GP, however, witnessed a jolt in subscription growth in the last quarter of 2009 with start-up campaigns pushing the total number of subscriptions over the 23 million subscription base.

The number of users increased by 1.3 million during the quarter compared to 0.2 million in the same quarter of 2008. GP's subscription base reached at 23.3 million with 44.4 per cent market share at the end of 2009.

Pointing out the surge in GP's subscription growth on introduction of reduced start-up price, the GrameenPhone top boss said: "The SIM tax continues to be a significant bane for the industry and a barrier for tele-penetration in the country" as subscriptions spiked each time the company opted to subsidise the tax.

However, lower capital expenditure during the quarter has been in line with traffic demand. Adjusted for non-routine items the net profit after tax for this quarter stood at Tk 2.35 billion.

GP was listed in the capital market and became the largest initial public offering (IPO) ever in Bangladesh's history.

Trading of GrameenPhone shares began in both Dhaka and Chittagong stock markets in November last year. The share of Tk 10 each was offered with premium at Tk 70 and on 30 December 2009 the trading price closed at Tk 187.5 in the Dhaka Stock Exchange.