May 09, 2013
Muscat: Oman Telecommunications Company (Omantel), the Sultanate's biggest telecommunication service provider, yesterday said its revenue grew by 3.1 per cent to OMR114.5 million for the first quarter of 2013, over the same period last year. However, the company's net profit edged down by 2.5 per cent to OMR29.1 million from OMR29.9 million for the same period of 2012.
The marginal decline in net profit is mainly attributed to the expansion of both 3.5G (second carrier) and 4G LTE network along with fixed NGN network which put pressure on both operation and maintenance and depreciation expenses, increase in external administration expenses amounting to OMR6.6 million 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 seven per cent to 3.883 million by end-March 2013 from 3.627 million for the same period last year.
Omantel's domestic subscriber base witnessed a remarkable growth of 9.7 per cent by end-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 Oman for the tenth quarter in a row.
The major reasons for increase in operating expenses are an increase in external administration expense amounting to OMR6.6 million on account of increased international retail minutes. Despite such substantial increase in cost, Omantel has decided to absorb bulk of these costs without passing it on to its subscribers.
Also, expenses related to employee cost, operation and maintenance and depreciation increased over the period. Expansion of both 3.5G (second carrier) and 4G LTE network along with fixed NGN network put pressure on both operation and maintenance and depreciation expenses.
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 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 TRA.
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.
© Times of Oman 2013
