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Ncell’s parent company Axiata has recently released its final-quarter financial report for the year 2020 on Thursday. Ncell Axiata, Nepal’s one of the leading mobile service providers, has faced a massive decline in the company’s profit and revenue during this year. They witnessed a massive loss despite doubling their data volume usage.
According to the final quarterly report of Ncell for 2020, Ncell incurred a loss of around Rs. 12.5 billion in revenue in 2020 compared to 2019. The total revenue of Ncell was Rs. 54.16 billion in 2019. However, the revenue dropped the next year. So, the total revenue of Ncell in 2020 is only Rs. 41.92 billion.
The company, which earned Rs. 12.72 billion in the last three months of 2019 has managed to earn only Rs. 10.31 billion in the same period of 2020. That is a drop of Rs. 2 billion in revenue in Q4 financial outcome Year on Year (YoY). Whereas Ncell maintained its revenue or rather slightly increased in Q4 as compared to Q3, 2020.
If we look at Ncell’s revenue for the last five years, in the year 2016, the company earned Rs. 58.65 billion in revenue. Then, the revenue somewhat remained in the same periphery. As a result, the revenue of Ncell was Rs. 58.05 billion and Rs. 57.46 billion in the next two years.
|Ncell Revenue (Billion)||58.65||58||57.46||54.16||41.92|
It means the company was facing some loss in revenue for the last five years, but the decline this year is the biggest ever. The income of Ncell has declined by Rs. 2.41 billion in the fourth quarter of 2020 alone.
Ncell’s profits have also fallen sharply in 2020. The company, which made a profit of Rs. 13.84 billion in 2019, has to satisfy with a profit of Rs. 3.55 billion by 2020. That’s a massive loss of around 10 billion in profit for Ncell in a year.
Similarly, the company has lost around 11.46 million customers compared to last year. According to the report, Ncell had a customer base of around 168.71 million in 2019. But, by the end of 2020, the profit is reduced to 157.25 million.
|Ncell Profit (Billion)||20.29||18.92||15.28||13.84||3.05|
Ncell has also expressed the reason behind the decrease in revenue. Voice call is one of the main sources of income for Ncell. Even now, voice service contributes over 76 percent to the company’s total revenue. As the use of OTT services increased and the use of voice services decreased in recent years, the company continued to lose revenue.
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The total data usage for the year 2019 was 9 crore MB which got doubled to 18 Crore in the year 2020. Similarly, the average data usage per subscriber increased from 963 MB to almost 2 GB per month. Thanks to the digital revolution enforced by the Covid-19 pandemic, 4G network expansion, and Smartphone penetration.
Despite having such a massive data volume increase, the revenue out of it declined surprisingly. The revenue out of mobile data service in the year 2019 was Rs 12.12 billion but it descended to Rs 10 billion in 2020. Ncell data revenue figures have fallen as the company provided higher volume data packs at a cheaper rate. Though they have this compulsion to compete for attracting more customers, the result came negative as their customer base also dropped in this period (as discussed above).
What do you think of Ncell’s 2020 financial report, especially regarding the massive revenue decline despite the data volume increase? Share your views in the comment section below.