MUSCAT -- Oman Telecommunications Company SAOG (Omantel), the Sultanate's leading telecom company, yesterday announced its financial results for the first quarter of 2013, showing an increase in the revenue by 3.1 per cent to RO 114.5 million despite having a marginal decrease in the net profit by 2.5 per cent to RO 29.1 million from RO 29.9 million in the corresponding period of 2012.
The marginal decline in the net profit is mainly attributed to the expansion of both 3.5G (2nd carrier) and 4G LTE network along with Fixed NGN network which put pressure on both operation & maintenance and depreciation expenses, increase in external administration expense amounting to RO 6.6 mn on account of increased international retail minutes as well as expenses related to employee costs.
Omantel subscriber base witnessed a good growth both in the domestic and group levels. The Company's total group customer base (including Worldcall subscribers) grew by 7 per cent to 3.883 million as of March 31, 2013 compared to 3.627 million on the corresponding period of 2012. Omantel's domestic subscriber base witnessed a remarkable growth of 9.7 per cent as of 31st March 2012 reaching 2.956 million mainly contributed by its mobile business. Omantel Mobile continued to lead the market with a significant growth in the Company's mobile network's market share to 58.6 per cent, making Omantel Mobile again the fastest growing mobile operator in the Sultanate for the 10th quarter in a row.
The total operating expenses increased by 5.4 per cent to RO 83.9 million compared to RO 79.6 million for the corresponding period of 2012. The major reasons for increase in operating expenses are mainly due to increase in external administration expense amounting to RO 6.6 mn on account of increased international retail minutes. Despite such substantial increase in cost, Omantel has decided to absorb bulk of these costs without passing on to its valued subscribers.
Also, expenses related to employee cost, operation & maintenance and depreciation increased over the period. Expansion of both 3.5G (2nd carrier) and 4G LTE network along with Fixed NGN network put pressure on both O&M and depreciation expenses. Commenting on these results, Omantel's Chief Executive Officer, Dr Amer Awadh al Rawas said: "We are proud to see our Company making a good growth despite the challenging market conditions and increased competition in the domestic market".
"As we are continuously working on providing our customers 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 3.5G network following the allocation of available spectrum by Telecom 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 Company's net profit which has marginally decreased by 2.5 per cent compared to the first quarter of 2012," Al Rawas pointed out.
"We are glad to see the fruits of having a strategy and operating model that is customer-centric. In fact our domestic market share has been increasing year on year despite the intensive competition and the entry of second operator in the fixed line services. Our mobile subscriber base has grown by 10.1 per cent year on year reaching 2.6 million subscribers as of 31 March 2013. I would like to thank our loyal customers, visionary Board, committed employees and supportive shareholders who have always been part and in support of Omantel's journey to excellence," Al Rawas concluded.
© Oman Daily Observer 2013
