Archive for July 29th, 2008

Telenor Pakistan Q2 2008 Earning Snapshot

Published by Babar Bhatti on July 29, 2008 under Business, Companies, Economy, Emerging Markets Telecom, Foreign Investment, Mobile Companies, Stocks

Telenor recently announced second quarter results for 2008 and lowered its growth forecast. The stock price fell down afterwards. This comes at a time when the leadership of Telenor Pakistan is about to change. This is in line with my previous post in which I commented on the slowdown for Telenor after a few months of rapid growth. On a positive note the margins improved.

According to Bloomberg “Increased costs of living in Pakistan, Bangladesh and Thailand and a rising Norwegian krone prompted Telenor to lower its 2008 revenue growth forecast to 3 percent from 5 percent. The company relies on eastern Europe and Asia for growth as Nordic markets reach saturation and traditional phone usage decreases.”

Among other trends, revenue per user (ARPU) continues to slide and there were fluctuations in the currency exchange rates. The highlights below are taken from Telenor’s second quarter earnings report available at Telenor website.

• The subscription growth slowed down compared to the previous quarter with net additions of 1.4 million, while the market share have remained stable at 20%, ranking Telenor Pakistan as the second largest mobile operator in Pakistan.

• ARPU in local currency decreased by 14% as increased average usage was more than offset by declining average prices.

• Total revenues in local currency increased by 54% mainly due to subscription growth of more than 7 million, partially offset by lower ARPU.

• EBITDA continued to improve and increased by 29% measured in local currency compared to the previous quarter.

• Capital expenditure was related to network roll-out to accommodate subscription growth and increased traffic.

• From 1 June 2008, in line with the national regulator‘s decision, the mobile termination rates in Pakistan were reduced from PKR 1.25 to PKR 1.10. The rates will be further reduced to PKR 1.00 from 1 January 2009 and to PKR 0.90 from 1 January 2010.