Omantel's loss-making Pakistan subsidiary WorldCall Telecom Limited (WTL) is likely to break even by the end of this year, according to Dr Amer al Rawas, chief executive officer of Omantel.
Addressing investors and analysts at the Muscat Securities Market (MSM) on Tuesday, Rawas said that the ailing WTL is already showing signs of improvement. "With the completion of US$70mn in funding soon, WTL is expected to break even by the end of this year," Rawas said.
In March this year, WTL received a US$35mn loan from Askari Bank in Pakistan against a corporate guarantee provided by Omantel. In 2008, Omantel acquired a majority stake of 56.8 per cent in WTL for RO72mn as part of its diversification strategy.
He added that WTL's revenues from data services and evolution-data optimised (EV-DO) services recorded 58 per cent and 26 per cent growth, respectively, contributing 37 per cent to WTL's total revenues. "The company has been able to reduce its net loss by 27 per cent this year due to growth in data business," Rawas said.
Total revenue of WTL declined by 16 per cent to RO3.3mn in the first half of this year mainly due to rate reductions in the long distance and international (LDI) business. "Of the total funding, US$35mn will be invested in improving company infrastructure and other things such as modernising systems," Rawas said.
He added that Omantel will incur an additional cost of RO4.4mn this year due to hiring of new employees and changes in terms of employment. The total impact due to the intake of 200 new employees would be around RO960,000, while the impact of salary increases and changes in employment terms would be around RO3.5mn this year.
© Muscat Daily 2011
