Nepal Telecom clarifies for the decrement in profit

Nepal Telecom has clarified for the latest financial report which showed a huge decrement in its profit and operating revenues. In a recent press statement, Ntc commits its motive to make use of the latest technologies to deliver affordable telecom services to all people. They also seek to contribute to the Nation’s development while at the same time improve their own commercial health.

NTC says they have around 2 crores 26 lakh (226 million) subscribers in all of their services from landline to Mobile (2G, 3G, 4G). Lately, they have focused their effort in modernizing and expanding their networks in both the Wired and Wireless services. Currently, they have prioritized their works for 4G LTE in Wireless and FTTH in Wired services (Find more info about progress below).

• NTC to use big data in the cloud.

Reasons for the profit decrement

After the details of the company plan, Ntc tries to clarify the unaudited latest financial report, which shows the major financial indexes of the company. Here are some of the reasons put by Ntc for the dip in the revenue/profit.

Shift to Wireless

People’s preference from fixed-line service to wireless mobile (cellular) services.

With such preference, usage of the wired service has decreased, making it one of the reasons for the profit plunge. The company expects to make up for the revenue from the fixed wired services as they have been migrating ADSL services to FTTH, adding the voice service from the fiber itself. They have the plan to provide IPTV service along with the fiber internet. With such service differentiation, they have firm belief to increase their revenue.

The mobile license renewal fee

The payment of the first installment: Rs 4 billion

The company said the first installment of the license renewal fee (total: Rs 20 billion) and the income tax increment from 25% to 30% has a major role in the profit decrement. After the payment only, NTA, the regulator renewed Nepal Telecom’s mobile license.

International Call revenue

The trend of the revenue decrement due to OTT apps

 As the trend in telecom worldwide shows the decrement of international voice call revenue, they say it is quite obvious to affect Nepal Telecom. NTC also says they are putting a lot of effort in increasing the data, voice, value-added services to compensate for the international call landing traffic.

Service to People

Customer Oriented than profit:

The company says they are more service-oriented than profit, providing affordable services to people in all parts of the country. With their obligations to people, they say they have been investing heavily to provide telecom services in far-flung areas. They claim they have not focused their expansion based on the revenue and profit.

Telecom service charge

No increment in data tariff despite TSC:

The company asserts they have the lowest data tariff in the country. Although the government had levied TSC over the internet cost, they say they have not increased the internet price, for their commitment to providing affordable services.

Despite the license renewal cost, income tax increment and technological challenges, Ntc says their contribution to Government account has upped by Rs 4 billion. As they have recently started their works in both FTTH and 4G LTE expansion, the effect will be seen in the current Fiscal year report.

Progress in 4G

Along with the clarification, Ntc informs about the progress of the running 4G LTE project. As per Ntc, they have already installed and tested the Core equipment. Similarly, they have been expediting the radio network works throughout the country. Read more on Ntc starts 4G LTE installation works. With which, they plan to make 4G commercially available to other parts of the country.

NTC indicators and plan

Some of the positive indicators as shown by the company are:

• Increment of data traffic by 121%
• Voice traffic by 44%
• Increment of active customers by 10%

With their target to improve the company health in the current FY, they have plans like

• Expansion of wired and wireless services to all parts of the country
• Providing novel Value-added services
• Improvement in Roaming and other international services
• Quality enhancement

The company discloses its target to increase the revenue and profit by 10% in the current FY. They will apply various measures to further decrease non-operating expenses.

From the above efforts, Ntc iterates its commitment to lifting the company’s financial status and maximize shareholder’s wealth.

Tell us what do you think of Nepal Telecom clarifications for the profit decrement. Comment below.