Nepal Telecom’s profit growth rate slows down

Increased licence fee, foreign exchange losses, and falling revenues caused by changing consumer tastes and preferences has pulled the Nepal Telecom (NT) net profit down by 42 per cent – compared to the last fiscal year – in the fiscal year 2018-19 that ended on July 16.
According to a consolidated interim financial report released by Nepal Telecom today, its net profit dropped to Rs 10.20 billion in the fiscal year 2018-19 from Rs 17.48 billion in fiscal year 2017-18, after it was obligated to pay Rs 4.02 billion for the second renewal of its licence, which had expired in 2014.
The state-owned utility still has to pay around Rs 16 billion in pending licence fees to the Nepal Telecommunications Authority (NTA). And as the second renewal has also expired in May, there is uncertainty over fees for a third renewal too.
According to the telecom service provider, the company was obligated to pay Rs 20 billion, despite a dispute with the regulating authority over the payment of Global System of Mobile Communication (GSM) renewal fees, which had accrued on May 12, 2014.
Though, the government rescheduled – on May 24 – the payment, and allowed to settle in five annual installments from the fiscal year 2018-19 to save the state-owned, the employees' union of the NT has demanded that the fee be withdrawn.
According to a statement released by the union, the company which has a paid-up capital of Rs 15 billion – Rs 5 billion less than the fee amount sought by the regulator – should not be subjected to such a huge fee as it will lead to a massive financial burden.
The Nepal Telecom had received approval to sell GSM services in 1999. Since there was no fixed charges set for approval and renewal fees at the time. The telecom company had, however, agreed to pay the amount which would be paid by other service providers in the future.
In 2004, when Spice Nepal – now Ncell – began operations, it had agreed to pay Rs 210 million for approval to run GSM service and Rs 20 billion after 10 years for renewal, which has put pressure on Nepal Telecom to pay the same charge as default fees for renewal of the GSM licence.
Telecom operators are, now required to renew their licences every five years after 10 years of operation. “The issue of quantification of the GSM licence renewal fee that expired in May this year is not settled within the authority,” Nepal Telecom said, adding that the company renewed its licence by paying nearly Rs 190 million and has amortised the cost accordingly. “The fee liability of third renewal, if confirmed and quantified may result in further cost to the company and hence, the net profit after tax will be adjusted by that extent.”
Apart from renewal fee, the telecom also attributed the decline in its net profit to a fall in revenue as it recorded Rs 36.78 billion in total income in the last fiscal year, a drop of Rs 2.24 billion compared to revenues of Rs 39.02 billion in the fiscal year 2017-18. The fall in profit has hit the public listed company’s earning per share as it has dropped to Rs 68.05 per share from Rs 116.56 in a year, according to the unaudited financial statement of Nepal Telecom. “The company also suffered a foreign exchange loss of Rs 153.79 million in the fiscal year 2018-19 against a gain of Rs 635.55 million in foreign exchange in 2017-18.”
The marketing schemes also cost the company Rs 775.26 million in discount schemes on recharge card sales. 
The telecom has blamed growing use of over-the-top messaging services like WhatsApp and Facebook Messenger over long distance and domestic voice calls for the decline in revenue, despite a growth in subscriptions. Earlier, long distance voice calls used to contribute a major chunk to the revenue, according to the telecom that has planned to expand the 4G network – to again gain the market – and also replace ADSL with fibre to the home (FTTH) connection.
The political bickering and red tape also forced the telecom service provider to loose its ground with the private players.

Nepal Telecom to introduce new social network site

Nepal Telecom plans to introduce a new social network site in March, The telecom service provider has been testing the site internally at present.

Managing director of the company Anoop Ranjan Bhattarai, today said that the social site will have the same facilities as Facebook, plus Skype, group message and Viber facilities. "Nepal Telecom has not yet named the site."

The new social network aims to initially benefit one million users, moving to 10 million people at a later date. Nepse-listed Nepal Telecom has invested Rs 900 million so far to construct the social network site.

Likewise, he urged the the regulatory bodies to simplify public procurement process to help company upgrade technologically, and remain competent in the market.

Though Nepal Telecom is competitive, it is finding difficult to upgrade technologically due to procurement act, he added, on the occasion of 10th anniversary.

The company that had earned Rs 11.2 billion net profit in the last fiscal year, is providing telecommunication service to almost one million customers through its GSM, CDMA, landlines, Wimax and ADSL internet services.

The company had also contributed Rs 7.6 billion to the government coffer as tax in the last fiscal year.

The company’s priority is to increase the country’s digital inclusion by expanding our digital presence all over the nation,” he added.

However, chief secretary Leela Mani Poudyal on the occasion, said that there is no legal barriers to the Nepal Telecom to expand its market. Emphasising on the need to focus on improving its service quality, he said that company can only survive in the long run if it can provide the customers with better and quality services

Special offers flood
KATHMANDU: Nepal Telecom's postpaid GSM and CDMA customers will get free 50MB data per month for the next three months. The company has announced discounts for its customers on the occasion of its 10th anniversary.

Internet base grows to 7.66 million in November

The internet subscriber base stood at 7.66 million in mid-November, up from 7.40 million in mid-October, according to the Nepal Telecommunications Authority (NTA).

The internet penetration rate has been up to 28.92 per cent in mid-November versus 27.92 per cent a month earlier, it said, adding that Ncell witnessed its mobile internet base (GPRS, Edge,WCDMA) go up to 3.80 million from 3.65 million a month earlier, whereas UTL's EV-DO internet base was stable at 99,265 and Nepal Telecom's total internet base stood at 3.68 million. The Nepal Telecom's dial-up base slipped to 4,765 from 4,770 but its ADSL base was up at 106,970 from 103,462 in October. It also served 3.43 million mobile internet subscribers, up from 3.31 million, and 136,573 EV-DO subscribers, the same as reported a month ago.

Nepal Telecom further reported 5,382 customers for its new Wimax service, up from 4,451 a month earlier, the regulatory authority's monthly report stated, adding that other ISPs served 89,216 internet customers, down slightly from 89,219 reported in October.

Internet base increases to 7.2 million

The internet user base grew to 7.20 million in mid-September, up from 7.14 million in mid-August.

The internet penetration rate stood at 27.18 per cent, up from 26.93 per cent a month earlier, figures from the Nepal Telecommunications Authority (NTA) show.

Ncell saw its mobile internet base – GPRS, Edge,WCDMA – slip to 3.53 million from 3.55 million a month earlier while UTL's EV-DO base grew to 98,151 from 97,104 in August.

Nepal Telecom's dial-up base go down to 4,794 from 4,804 but its ADSL base grew to 116,990 from 115,927 a month earlier.

The company also served 3.22 million mobile internet subscribers, up from 3.14 million, and 136,573 EV-DO subscribers, the same as the company reported in the previous month. Nepal Telecom also had 3,689 customers for its new Wimax service, up from 3,177 in August. Other ISPs served 89,219 internet customers, up from 88,568 a month earlier, the regulator added.

Likewise, the country has 847,008 fixed telephony users in mid-September, down from 847,062 in mid-August. The total includes 648,181 PSTN subscribers and 198,827 WLL telephony users.

Nepal Telecom led with 642,353 PSTN customers, down from 642,754 a month earlier, while STM Telecom Sanchar's base remained constant at 5,230 customers, it revealed. "Smart had 598 PSTN public phone centres."
However, the telephone penetration rate reached to 82.49 per cent as of mid September as some 21.85 million Nepalis have access to telecom services out of the total population of 26.4 million.

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.

Mobile phone users growing by 10 people everyday

Almost 10 people are getting the mobile phone facility in a day, according to Nepal Telecommunications Authority (NTA) report.
The number of mobile phone users increased by 1.5 million — an increment of 13 per cent — in last six months, the latest Management Information System (MIS) report of the Authority stated, adding that the number of mobile phone users stood at 12.5 million by mid-October while by mid-May 11 million individuals had subscribed for mobile phones.
Along with increased number of mobile users, the overall telephony penetration rate has also increased by over 10 percentage points to 53.50 per cent from six months ago's 43.65 per cent. The telephony rate included all three kinds of available telephone service; fixed, mobile, limited mobility services.
Though, the mobile users have continually grown lately the number of landline users have contracted by 1.24 per cent in recent six months. At present there are about 843,847 fixed landline users while six months ago there were 845,657 fixed landlines.
Telephony penetration rate refers to percentage of active phone numbers within the specific population. However, within the growing number of people with two-three SIM cards of different carriers the right assessment of telephony penetration rate has become difficult to assess entirely based on active number of SIMs.
The regulator's report also revealed that Nepal Telecom (NT) is losing its market share to its prime competition Ncell. Nepal Telecom covered 52 per cent of the market by mid-May, which has come down to 49 per cent as Ncell's market share has crept up as Nepal Telecom's market share waned.
Ncell gained 45 per cent market shares by mid-October which stood at 42 per cent six months ago. UTL and other telecommunication service provider's market scenario did not change during the period.
Similarly, the consumers of data and internet services have crossed 3.6 million, according to the report. "The users of data and internet services were 3.2 million until previous month."
The internet users via GPRS available in the mobile phones dominated the internet usage as 91 per cent of total internet penetration can be accounted for GPRS. Likewise, among the internet users, Ncell tops the list of internet service providers with 59 per cent of domination in the market followed by Nepal Telecom with 38 per cent market share in internet subscription with its GPRS, ADSL, Dial-Up and CDMA services.


The Telephony Penetration Rate
Mobile: 47.38
Fixed:3.16 Others:2.9

Internet user base climbs by 160 per cent

The total number of internet users has grown by a significant a whopping 160 per cent within a year, according to the Nepal Telecom Authority (NTA) -- the regulator of the telecom service providers -- latest report.

"At the end of fiscal year 2009-10, the number of internet users rose to 1,359,805, from 515,592 a fiscal year ago, the data revealed.

A sizeable portion of the growth is attributed to the number of people accessing the internet through General packet radio service (GPRS)-enabled mobile phones, it said, adding "which has helped internet penetration to increase to 4.85 per cent."

Of these, GPRS internet users accounted for 1.153 million, up a massive 800,000 in twelve months.

GPRS is a packet oriented mobile data service on the 2G and 3G cellular communication systems global system for mobile communications (GSM).

Meanwhile, the number of Asymmetric Digital Subscriber Line (ADSL) subscribers to Nepal Telecom (NT) increased to 45,435 from 15,661 previously.

ADSL is one form of the Digital Subscriber Line technology, a data communications technology that enables faster data transmission over copper telephone lines than a conventional voiceband modem can provide.

However, the telecom authority also reported that the number of subscribers of dial-up, wireless modem, cable modem, optical fibre, earth net and cable net subscribers fell over the same period, standing at 73,186, compared to 1,13,406 a year earlier.

Nepal Telecomm, shareholders at loggerhead

Nepal Telecom (NT) added 10,095 mobile users everyday between last July and this March, according to the company.
The company -- that held its first annual general meeting (AGM) recently -- said at a press briefing here today that it has a customer base of 24,22,699 in the pre-and-post paid mobile segment whereas the number of landline users is 5,51,416 and that of CDMA users 6,86,032.
Its new service ADSL users has also reached 13,969 till February. The company posted a net profit of Rs 7.94 billion in from the fiscal year 2064 to 2066 BS. It is looking to achieve a target of Rs 10.13 billion for the current fiscal year. In its AGM, however, NT decided to distribute only 25 per cent cash dividends to its shareholders. The unhappy shareholders have formed a struggle committee. They have accused NT of not mentioning what happened to the Rs 500 per unit share in the annual report. "The company did not listen to shareholders and took an arbitary decision during the AGM," complained Hari Kumar Shah, a shareholder. "While floating shares also NT did not mentioned its net worth but added Rs 500 premium stretching a minimum bid of a Rs 100 per unit shares to Rs 600 per unit," he added.
From last June-July's teledensity of 10.12, in February it has reached 13.28 --- the highest teledensity in this region. The company has also started providing its pre-paid services on demand and its GSM/CDMA has reached all 75 districts, said the company.However, the company is blamed for its poor quality and service. "We have been facing many problems and receiving many complaints but at the same time we are trying to improve our service quality," said Amar Nath Singh, managing director of NT. He said that the results will be felt in the next five to six months.
Admitting that Nepal Telecom has not been able to meet the needs and expectations of the public, Singh added that they are looking to expand extensively and consumers will be experiencing a change in all aspects of the service soon. "Load shedding has been affecting the smooth functioning of services as the BTS towers cannot function due to prolonged hours of load-shedding," he said adding that NT is adding alternative means of energy like solar panels and generators to counter the problem.
Nepal Telecom also made public today that it has implemented Employee's Code of Conduct.