Ncell revenue falls in the first half of 2019

Ncell, the first private telecom operator of Nepal has seen a fall in the first half revenue of 2019. According to Ncell’s parent company Axiata, the revenue decreased by around six percent YoY.

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The figures published by Axiata shows the six months revenue in 2019 to be NPR 27,853 million while the same period had revenue of NPR 29,524 million in the year 2018. Which shows the decrement of the revenue by 5.7%. Among which, the revenue from the core mobile goes down by 3.2%. The core mobile revenues include income from voice and data usage.

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Ncell cites the impact of Telecom service charge (TSC) since July 2018 for the decrement in core mobile revenue.

Similarly, the revenue from international long distance (ILD) has been dropping sharply from some years. This period also showed a drop of 13.7% in the ILD revenues compared to that of the same period in 2018.

Revenue decrement

The Core mobile and international long distance are the main sources of income for telecom operators. The Global trend shows the continuous decrease in the ILD and Nepal is no exception, the reason being the preference of OTT services for international calls. But the core mobile revenue decrement is quite alarming that means Ncell subscribers started to spend less although the subscriber number is in an increasing state. Despite the decrement in the revenue, Ncell manages to keep the EBITDA margin, which is around 61 percent.

The reduction in mobile revenue YoY was mainly attributable to decrement in core mobile voice, data revenue and the decrement in International call landing. The decrement in the core mobile revenue is actually due to the intense competition. This also decreases the ARPU (average revenue per user).

As per the report, there are around 1 crore 66 lakh Ncell subscribers, the total number of distributed SIM cards. Out of the total subscribers, around 50% of them are data users. This is quite an achievement due to which Ncell has increased the data usage by around 11 percentage. Ncell has around 3 thousand 3G towers and 1700 4G towers across the country.

Axiata also mentions the unfavorable regulatory environment and the Capital Gains tax as the risk for their telecom market here in Nepal. All in all, their data shows a negative six percent growth rate for Ncell’s market.