Oman Telecommunications Co (Omantel) announced its preliminary financial results on Wednesday posting a 2.5 per cent decline in first-quarter net profit to RO29.1mn from RO29.9mn in the corresponding period of 2012.
The company, however, saw a 3.1 per cent increase in revenue to RO114.5mn from RO111.1mn last year.
According to a company press release, the decline in net profit is mainly attributed to the expansion of both the 3.5G (2nd carrier) and 4G LTE networks along with the fixed NGN network which put pressure on operation, maintenance and depreciation expenses, increase in external administration expenses, amounting to RO6.6mn, on account of increased international retail minutes as well as expenses related to staff costs.
Commenting on the results, chief executive officer Dr Amer Awadh al Rawas said the company posted good growth despite challenging market conditions and increased competition in the domestic market.
"As we are continuously working on providing our customers an enhanced customer experience, Omantel made huge investments to expand the reach of its network and roll out the new state-of-the-art network and the second carrier on the 3.5G network following the allocation of available spectrum by the Telecommunications Regulatory Authority. These investments along with increased employee costs and increase in external administration costs have contributed to an increase in expenses, by 5.4 per cent, therefore impacting the companyÕs net profit," Dr Rawas said.
Total operating expenses increased 5.4 per cent to RO83.9mn from RO79.6mn. This was mainly due to the increase in external administration expenses, amounting to RO6.6mn, on account of increased international retail minutes.
Omantel said its subscriber base witnessed a growth both at the domestic and group levels. The company's total group customer base (including WorldCall subscribers) grew seven per cent to 3.88mn as of March 31, 2013, compared to 3.63mn in the corresponding period of 2012.
Omantel's domestic subscriber base witnessed a remarkable growth of 9.7 per cent as of March 31, 2013, reaching 2.96mn, mainly contributed by its mobile business.
Dr Rawas added, "In fact our domestic market share has been increasing year-on-year despite the intensive competition and the entry of a second operator in the fixed-line segment. Our mobile subscriber base has grown 10.1 per cent year-on-year reaching 2.6mn as of March 31, 2013."
© Muscat Daily 2013
