ANL 24.00 Increased By ▲ 0.20 (0.84%)
ASC 16.54 Increased By ▲ 0.14 (0.85%)
ASL 22.60 Decreased By ▼ -0.05 (-0.22%)
BOP 8.60 Increased By ▲ 0.22 (2.63%)
BYCO 9.09 Increased By ▲ 0.28 (3.18%)
FCCL 18.70 Increased By ▲ 0.23 (1.25%)
FFBL 24.75 Increased By ▲ 0.15 (0.61%)
FFL 18.20 Increased By ▲ 0.15 (0.83%)
FNEL 8.57 Increased By ▲ 0.03 (0.35%)
GGGL 22.34 Increased By ▲ 0.04 (0.18%)
GGL 44.29 Increased By ▲ 0.34 (0.77%)
HUMNL 7.18 Increased By ▲ 0.01 (0.14%)
JSCL 22.00 Increased By ▲ 0.42 (1.95%)
KAPCO 38.00 Decreased By ▼ -0.10 (-0.26%)
KEL 3.62 Increased By ▲ 0.02 (0.56%)
MDTL 3.12 Increased By ▲ 0.05 (1.63%)
MLCF 37.25 Increased By ▲ 0.77 (2.11%)
NETSOL 156.75 Decreased By ▼ -1.00 (-0.63%)
PACE 6.12 Increased By ▲ 0.11 (1.83%)
PAEL 31.93 Increased By ▲ 0.28 (0.88%)
PIBTL 9.57 Increased By ▲ 0.10 (1.06%)
POWER 8.10 Increased By ▲ 0.06 (0.75%)
PRL 21.37 Increased By ▲ 0.39 (1.86%)
PTC 10.59 Increased By ▲ 0.21 (2.02%)
SILK 1.72 Increased By ▲ 0.03 (1.78%)
SNGP 43.80 Increased By ▲ 0.05 (0.11%)
TELE 22.80 Increased By ▲ 0.10 (0.44%)
TRG 179.30 Increased By ▲ 3.39 (1.93%)
UNITY 36.45 Decreased By ▼ -0.52 (-1.41%)
WTL 3.35 Increased By ▲ 0.02 (0.6%)
BR100 5,058 Increased By ▲ 31.83 (0.63%)
BR30 25,042 Increased By ▲ 269.29 (1.09%)
KSE100 47,148 Increased By ▲ 227.95 (0.49%)
KSE30 18,717 Increased By ▲ 59.31 (0.32%)

Coronavirus
VERY HIGH Source: covid.gov.pk
Pakistan Deaths
27,072
6824hr
Pakistan Cases
1,218,749
2,92824hr
5.08% positivity
Sindh
448,658
Punjab
419,423
Balochistan
32,707
Islamabad
103,720
KPK
170,391

One of Pakistan’s prominent mobile network operators (MNO) closed the half-year ended June 30, 2021, on a mixed note. As per latest financial results announced by Telenor Group, its Pakistan subsidiary Telenor Pakistan managed to grow operating profits by 17 percent year-on-year to Rs12 billion in 1HCY21. The turnaround comes after this MNO recorded 11 percent yearly contraction in operating profits during CY20. On the other hand, average revenue per user (ARPU) continues to chart downward trend.

At the top, the total revenues reached almost Rs53 billion in the six-month period, showing a growth of 6 percent over 1HCY20. (Rupee figures are derived after conversion from the reported Norwegian Krone (NOK) data). At this pace, Telenor Pakistan is set to cross the Rs101 billion in topline that it scored during CY20. But it will still be shy of the level it reached in CY18, underscoring the need for faster revenue growth.

Topline expansion is contingent on continued subscription growth and users spending more on connectivity. The revenue growth in the analysis period is driven mainly by the effect of addition of nearly 4 million subscribers, with the overall subscription tally reaching 48.8 million as of June 2021. This growth is healthy. But at the same time, the ARPU came down to Rs167 per month during 1HCY21, down 7 percent from Rs180 per month during 1HCY20.

The ARPU is going down despite the operator reporting strong double-digit growth in revenues from data services (mobile broadband). It is likely that new users are pulling the average down amid existing users cutting back, necessitating the need to improve monetization of the subscription base. The operator is spending significant amount of capital on boosting its mobile broadband network – capex stood at nearly Rs9 billion in 1HCY21, up almost 9 percent over the same period last year.

As ARPU slides amid erosion of purchasing power in a price-sensitive market, operators in this sector have had to contain their spending in order to shield profitability from the effects of rising energy prices amid higher marketing spend due to stiff competition for data subscribers. In 1HCY21, Telenor Pakistan grew its EBITDA by 4 percent year-on-year to Rs29 billion, posting EBITDA margin of 54 percent (1HCY20: 55%).

Despite lower ARPU, Telenor Pakistan managed to post better operating performance in the analysis period. Yet, the group financials could have reaped more benefit had it not been for rupee depreciation negatively impacting growth in NOK terms. While the whole sector is feeling the pressure on the ARPU front, the latest budget also failed to excite (read: “Budget scare for digital economy,” published June 16, 2021). Operators need to beef up data monetization efforts in what remains a challenging environment.

Comments

Comments are closed.