Nepal Telecom (NTC) has announced its unaudited first quarter results for Fiscal Year (FY Q1) 2080/81 which ended in Ashoj, 2080. The company posted over Rs 10.64 arab in revenue down by 3.54% year-over-year and over Rs 2 arab in profit, also a decrease of 3.90% compared to the same period from the previous fiscal year FY 2079/80. The company has attributed its lower earnings to infrastructure maintenance, changes in service tariffs, growing OTT usage, etc. Let’s find out more in detail.
In Q1, FY 2080/81 (Shrawan, Bhadra and Ashoj, 2080), Ntc generated revenue of Rs 10 arab, 64 crore, 87 lakh, and 93 thousand. During the same period last FY (Ashoj, 2079), the company posted the figure of Rs 11 arab, 4 crore, and 90 thousand in revenue. That is, the state-backed company’s revenue decreased by Rs 39 crore, 12 lakh, and 97 thousand or by 3.54%.
|Total revenue Q1 FY 2080/81||Total revenue Q1 FY 2079/80||Difference|
|Rs 10,64,87,93,000||Rs 11,04,00,90,000||Rs 39,12,97,000 (3.54%)↓|
Likewise, the company saw its total operating revenue decrease by Rs 49 crore, 25 lakh, and 21 thousand. In Q1 F Y 2080/81, Ntc posted a total operating revenue of 8 arab, 58 crore, 50 lakh, and 63 thousand. The same amount stood Rs 9 arab, 7 crore, 75 lakh, and 84 thousand in the same period in FY 2079/80. That is, in the first quarter of this year, the company’s total operating revenue decreased by 5.43%.
|Total operating revenue Q1 FY 2080/81||Total operating revenue Q1 FY 2079/80||Difference|
|Rs 8,58,50,63,000||Rs 9,07,75,84,000||Rs 49,25,21,000 (5.43%)↓|
Ntc profit drops in Q1, FY 2080/81
The decrease in total revenue also translated into the company’s profit in the first quarter of the current fiscal year. As per the report, Ntc earned a total of Rs 2 arab, 2 crore, 74 lakh, and 32 thousand in profit in Q1, FY 2080/81. This is a decline of Rs 19 crore, 80 lakh, and 74 thousand (8.90%). In the previous fiscal year’s first quarter, Ntc’s profit amount was Rs 2 arab, 22 crore, 55 lakh, and 6 thousand.
|Ntc profit, Q1 FY 2080/81||Ntc profit, Q1 FY 2079/80||Difference|
|Rs 2,02,74,32,000||Rs 2,22,55,06,000||Rs 19,80,74,000 (8.90%)↓|
As per the company, Nepal Telecom generated Rs 45.05 in per-share revenue during its first quarter of FY 2080/81.
Check out: Nepal Telecom’s Autumn Offer 2080
Reasons for revenue and profit decrease
Ntc has pinned the blame on the following reasons for its fall or changes in its revenue and profits:
- The growth in OTT usage has hit hard on the revenues coming from interconnection. Due to this reason, the company saw its revenue fall by Rs 49 crore, 14 lakh, and 85 thousand compared to the first quarter of 2079/80. NTA has branded OTT use for calls illegal.
- Decrease in the use of the company’s services due to economic recession.
- Rs 5.99 crore gain from foreign exchange due to the changes in exchange rates.
- Sites not being able to come into operation due to the adverse weather conditions which impacted electricity supply and maintenance.
- Due to the damages caused to its infrastructure during construction, expansion, and relocation works by government agencies and also the damages incurred from the cable management works carried out by municipalities and ward offices.
- For expanding services in remote and rural areas which are commercially less potential and also the service upgradation works which is raising its investment expenditures.
- Changes in service rate policies and rules that decreased its service tariffs adversely affected its revenues.
- The loss of Rs 14.81 crore in financial revenue is due to the changes in the bank’s interest rates.
Low revenues becoming a concern!
The latest report highlights the continuous loss of revenues for Nepal Telecom, but it also reflects the state of the industry in general. Ncell, a private operator and Ntc’s immediate competitor has also been facing the same fate with its finances.
Both companies have maintained revenue losses on decreasing voice services, cheaper data packs, increasing OTT usage, etc. To combat the dwindling finances of telcos, NTA reasons, that it’s seeking to implement TERAMOCS. However, so far, both companies have expressed hesitation to sign up for the project citing user data concerns, phone-tapping, and other reasons.
- Reasons Nepal Telecom is Hesitant for TERAMOCS Implementation
- Ncell refutes misleading news about sharing user data, studying TERAMOCS integration
Do you think Ntc’s lowering revenues again in Q1, FY 2080/81 should be a worry, or do you think the company should seek earnings from different perspectives than just Fiber internet, and data packs? Do share your input in the comments below.
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