Nepal Telecom’s net profit drops, revenue grows, plans expansion

Though Nepal Telecom’s (NT) has posted its operating profit to Rs 37.60 billion, the Nepse listed company has recorded decline in its net profit by Rs 1 billion to 11.20 billion in the last fiscal year 2012-13 due to mandatory payment of the licence renewal fee to Nepal Telecom Authority (NTA).

Nepal Telecom has to pay Rs 20 billion in installment to the NTA whereas it has paid Rs 2.5 billion as the first installment renewal fee in January, according to the telecom service provider’s spokesperson Gun Keshari Pradhan.

Nepal Telecom has contributed Rs 20.37 billion – Rs 6.58 billion dividend, Rs 4.14 billion including VAT, Rs 4 billion income tax, Rs 1.98 billion in royalty and Rural Telecommunication Fund, Rs 2.31 billion in GSM renewal fee and Rs 1.33 billion in frequency fee – to the the government coffer in the fiscal year 2012-13, she said, adding that it has also projected to contribute Rs 21.35 billion to the government coffer in the current fiscal year. “The company has projected Rs 41.65 billion operating profit with some Rs 15.95 billion more investment in the current fiscal year."
Nepal Telecom plans to distribute 2.9 million additional lines, including two million GSM lines and aims at expanding CDMA coverage to all the 75 districts in the country, in the current fiscal year 2013-14, Pradhan added. “The NT also plans to launch integrated billing system and revamp its customer service system too by the end of the current fiscal year.”

Estimating a budget of Rs 69.95 billion for the current fiscal year, the NT aims at installing 500 Wi-Fi hotspots in different parts of the country.

As the competition is increasing in the telecom sector with the aggressive expansion of Ncell and other telecom service providers, the Nepal Telecom is also forced to expand and upgrade its service and quality.

NT’s market share stands at 46 per cent as its total subscriber base has touched 8.96 million as of mid-June 2013, according to the the latest Management Information System (MIS) report published by the Nepal Telecom Authority (NTA). “NT added 1.15 million new data users to 3.1 million and its market share in the data segment has increased by five percentage points in a one year from mid-June 2012 to mid-June 2013, due to mainly by the growth in the number of GPRS, WiMax and ADSL services users,” the report added. “The number of NT’s subscribers reached 8.96 million.”

The NT has listed 150 million-unit shares at the Nepse, where it’s per unit share has been traded at around Rs 550. Last fiscal year, the company had distributed 48 per cent cash dividend to its shareholders from the profit of the fiscal year 2011-12.