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In a sign that the telecommunications sector is under increasing distress amid the ongoing macroeconomic crisis and rising cost of utilities, one of the prominent and profitable mobile network operators (MNOs) has declared a massive operating loss in the half-year ended June 30, 2022. As per the latest financial results released by the Telenor Group, its Pakistan subsidiary posted an operating loss of Rs42 billion in 1HCY22, (compared to an operating profit of Rs12 billion in the same period last year).

(The reporting currency of Telenor Group Norwegian Krone – NOK. The results analyzed here are provided in PKR (rupee) terms, after conversion from average NOK/PKR in the relevant analysis period).

It doesn’t help if the topline growth is meager. The Rs53 billion topline of Telenor Pakistan during 1HCY22 was only 0.7 percent higher on a yearly basis. The abysmal topline growth looks even lower in real terms, after adjusting for double-digit inflation. The topline growth came in low despite the MNO taking price increment in this period. The 1 percent+ yearly gain in number of subscriptions, which reached 49.54 million as of June-end 2022, also couldn’t provide a proportional increase in revenues.

As a result, the average revenue per user (ARPU) during 1HCY22 fell by 2 percent year-on-year to Rs163 per month, compared to Rs167 per month in 1HCY21. The lack of topline vigor was further aggravated by the large 21 percent yearly increase in operating expenses to Rs20.9 billion in the half-yearly period. Rising electricity tariffs, fuel prices and other input costs meant that Telenor Pakistan spent 40 percent of its total revenues on operating expenses in 1HCY22, higher than 33 percent in 1HCY21.

Consequently, the operator’s EBITDA fell by 9 percent year-on-year to Rs25.9 billion in the analysis period. This led to EBITDA margin of 48.9 percent (in terms of total revenues), down from 54.4 percent seen in the same period last year. This isn’t really catastrophic for financials, as recovery can be made from the business downtrend in a better economic climate. What is surprising in the latest Telenor Group report is the massive operating loss of Rs42 billion (NOK 2.064 billion) in 1HCY22 for Telenor Pakistan.

It turns out that the huge operating loss is due to accounting treatments made to reflect updated value of Telenor Group’s assets in Pakistan. Specifically, Telenor Group booked an ‘impairment loss’ of NOK 2.5 billion (almost Rs51 billion) in the second quarter, related to “property, plant and equipment, right-of-use assets and intangible assets”. The Telenor Group has cited “deteriorating macro-economic situation and adverse Supreme Court ruling” as the reasons behind booking this large-sized impairment loss.

The former aspect (macro-economic situation) concerns rising interest rates and higher country risk premium for Pakistan, impacting the weighted-average cost of capital to operate in the country. And the latter (legal) aspect is on account of the apex court’s rejection (dated May 25, 2022) of Telenor Pakistan’s appeal against the PTA’s license-renewal terms and conditions (mainly renewal price).

A large loss in the subsidiary’s valuation – which comes on top of diminishing growth in NOK terms, as PKR depreciation dilutes any local growth – is bound to impact Telenor Group’s long-term investment perspective on this market. The operating environment has been challenging for some time now. During the half-year, the capital spending (non-license/non-spectrum) reduced by 14 percent year-on-years to Rs7.5 billion. The trajectory of capex in coming quarters will be a key factor to assess continued sponsor interest.

Comments

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Akkas Gill Jul 21, 2022 01:04pm
Telenor was our favourite network but now irritating due to worse network and signal lost problem. And Easypaisa also closing accounts on a minner reasons thats why costumers d'nt believe or trust on Telenor.
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Nauman Zahid Jul 21, 2022 04:25pm
My telenor experience is worst ever. Time of Jazz/Zong to takeover Telenor company. I already converted all my sim from telenor to other networks
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Nauman Zahid Jul 21, 2022 04:28pm
Worst experience with telenor. Already converted all my sim from telenor to other networks
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Sanaullah Abbasi Jul 21, 2022 07:57pm
Converted my telenor sim to Jazz.. Telenor is very irritating network.. slow speed,low coverage. Customer service also very bad.
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Sherafzal Khan Jul 21, 2022 08:40pm
Telenor is my favourite SIM card it's packages have very low price but network is slow
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Nano Jul 21, 2022 08:54pm
Telenor is a bullshit company non professional approach, disgusting telenor
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Altaf Ahmad Khan Jul 22, 2022 01:11am
I think it was not the right time to update books on parity basis. Besides this will adversely impact the customer confidence Focus on improvement of network KPIs is the pertinent thing to do.
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Faheem Ahmad Jul 22, 2022 02:46am
Telenor is my fav network, but since last 3 4 years they are not focusing on quality and improvements to the network as the zong or jazz do, and they have signal issues
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Faheem Ahmad Jul 22, 2022 02:51am
Telenor needs to improve and invest in LTE
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Naseer Jul 22, 2022 02:52am
Telenor's network has been very poor for the last few years and there is still a problem with calls and internet. If the network is not fixed, the loss is very poor service but under compulsion the telenors have been using it for the last 15 years.
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Shukatkhan Jul 22, 2022 05:24am
100% percent kharab network hy Network is slow
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Dr Muhammad Zahid Jul 22, 2022 05:35am
In dera Ismail Khan Telenor is worst
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Dr Muhammad Zahid Jul 22, 2022 05:36am
Telenor is beyond repair now
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Danyal Salim Jul 22, 2022 06:43am
One of my network sim card which I can say that I've been using since my childhood till now at my 20's is Telenor, its still on my phone and totally satisfied with their Internet Service, the main reason that I hate it is their Network Coverage service and Issue of Signals which I only face in the lower areas of any place where I go, and the worst is that signals are totally lost in my own house! Else wherever I go, I don't really face any major issues! You guys need to build trust once more by strengthening your networking and coverage! You'll surely then cover the Rs.42billion Op.Loss into Net Profits
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Hafiz Abdul rehman Jul 22, 2022 06:49am
Hamary shehr wijh men kafi dinobsy telenor ki service boht buri hy khas tor py jun light band hoti hy to service e band ho jati ho
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Ibad Jul 22, 2022 12:30pm
The reason is very poor performance of Telenor network. I' had Been in chitral, Peshawar, noshehra temergira, Islam Abad, and Karachi since 2020. I didn't saw good performance of Telenor in any city. That's why public avoid Telenor and using other network.
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waleed shwrafzal Jul 22, 2022 01:11pm
actually the reason is that telenor packages are good but internet speed is not well i myslef faces too much problems while using telenor internet and now im using jazz for internet purpose telenor packages are lighter in price but speed is not goood as compare to other companies so kindly focous on your internet speed and calling service as well
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TelenorFan Jul 22, 2022 01:31pm
❤❤❤
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Ravaid khan Jul 22, 2022 02:04pm
so sad
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Ravaid khan Jul 22, 2022 02:05pm
so sad . i read this paragraphs
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Asif iqbal Jul 22, 2022 02:12pm
Telenor is just looting people of Pakistan they have no new package they have no coverage in rural areas they are just passing their silly time and just waiting when will they leave Pakistan
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Mehdi Jul 22, 2022 02:33pm
Every company have networking issue, i am using telenor for gaming becuz ping is stable on it
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Khwaiz Jul 22, 2022 04:11pm
Bad experience Signal problem Internet issue
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Khwaiz Jul 22, 2022 04:12pm
Signal issue Bad internet services Worst experience Now I want to convert all my Telenor sims to other networks
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Tanvir Abbas Jul 22, 2022 04:42pm
Telenor does not solve the speed of internet and calls voice quality . Its irritating condition of calling so mostly people chnged the network or other way to make call so it should improve it
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Muhammad bilal mustafa Jul 22, 2022 06:18pm
Please give me the urgent basis loun I need many many neeed urgent 20000 please give me requests
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Imran Javed Jul 22, 2022 06:28pm
Bakwas third class network cheap network..
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Imran Javed Jul 22, 2022 06:29pm
Bad experience Signal problem Internet speed slow Light off Telenor service off as well .
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Saeed Jul 22, 2022 08:05pm
This is a company which is worst customers services in telecom industry ۔۔Must be collapsed asap
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Saeed Jul 22, 2022 08:06pm
worst company worst customer services
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Saeed Jul 22, 2022 08:09pm
its worst telco bad customer services Poor management
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MSK Jul 22, 2022 08:45pm
I am using telenor since almost 15 to 17 years and was happy a lot but now since last couple of years I am gonna fade up and thinking for changing the network. Presently I must say that telenor is become worst as well as greedy to make money without providing the quality services to its customer.
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Khalid Hyder Jul 22, 2022 09:25pm
Telenor is now the worst service provider. In DHA Phase 1 Rawalpindi the cell towers close down as there is no battery backup. I complained to PTA but Telenor took no action on their complaint. Jazz is working fine in DHA Phase 1 Rawalpindi area. Telenor should pack up and go home and not bother it's subscribers anymore
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Asad munir Jul 22, 2022 09:52pm
Dear sir if you devide your business at direct sales team as jazz DSR programe in 2010 very useful
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Ali khan Jul 22, 2022 10:04pm
Tablet ke saray sims log choray kar k mobile main chalatay hain pakistan peshawar 1206 franchise action please
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Waseem Ahmad Jul 22, 2022 10:56pm
Telenor is one of the pathetic network. they should leave Pakistan market.
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Abdulkhaliq Jul 22, 2022 11:37pm
I need loan
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Razaq Jul 23, 2022 12:39am
So sad, i used telenor for many years but in the last Telenor became the worst network of Pakistan due to many reasons and still they are. Instead focusing on service improvement they are removing their towers and its internet LTE speed is so slow even 3G mode of Zong/Jazz is better than Telenor lte. Even ufone is more better than telenor nowadays. Telenor should sell their network to other companies. Than maybe it would be helpful.
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Abdul Waris Jamali Hyderabad Jul 23, 2022 07:11am
Telenor network was better before , now a days it is Pakistan s' mostly disturbed network that has no network signals nor it's internet access to upload or download any page while customers pay for that. Please improve it or close it. Ptcl should take action .
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Danish Jul 23, 2022 08:30am
Apka net thek hoga to Kuch faida hoga Phla net to thek krlo Speed Ati ni
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M Amir Jul 23, 2022 08:42am
Telenor was our Best network due to I work on network field but now irritating due to impsode on political party thy treat for network it's imposed our and regulations
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Shahid Hussain Jul 23, 2022 10:25am
Telenor is my favorite network but nowadays (1month) idk Telenor signal rip
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Haider Mahmud Jul 23, 2022 10:46am
Being a company with strong resiliency & fighting spirit, Telenor is bound to recover soon InshaAllah
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Muhammad Tariq Younas Jul 23, 2022 10:47am
If this company loosing businesses, it is because this company telling lies. Deceiving people and looting their balance with both hands. So people letting it out.
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Ghulam DASTAGEER Jul 23, 2022 02:24pm
Sir humara Village may single ka bhot zada Masla hai sir hum call pr see targa bat bi ni kar shata hai Telenor ka tour bi bhot kareeb hai phir single ni ata hai humara Village sharghur roat pr hia pull 29d Telenor ka tour Laga howa 2km dohor humara Village say please sir humara Masla hall kya Ja ap ki bhot bhot marbani ho gi sir ...... Coplent name ghulam DASTAGEER from Chak no 30d depalpur okara
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M KAMRAN Jul 23, 2022 08:17pm
ہمارا گاؤں موچیوال تحصیل شاہ پور ضلع سرگودھا میں ہے یہاں پر ٹیلی نار کا ٹاور بلکل اڈے کے پاس لگا ہوا ہے اور انٹرنیٹ کی رفتار بالکل آ ہستہ ہے اور جب بجلی چلی جائے تو پھر بالکل سب کچھ بند ہو جاتاہے ۔ یہاں پر اکثریت لوگ ٹیلی نار کا نیٹ ورک ہی استعمال کرتے ہیں ۔ برائے مہربانی اس مسئلے کو جلد از جلد حل کیا جائے ۔شکریہ
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Sonita Jul 23, 2022 08:40pm
It was my best but when I worked with management of Telenor I found they take uncertain decisions for product easypaisa like football b/w Telenor bank and Telenor GSM.lots of employees left and they fired them without any notice or reasons...
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Zeeshan Khan Jul 23, 2022 10:01pm
Telenor is my favourite network but now irritating due to worse network and signal lost problem. Data speed is so irritating and after alot of complaints they are not fixing it. Now I am planning to convert my sim to other network.
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Muneeb Ahmed Jul 24, 2022 02:16am
Telenor Pakistan network is an irritating network. Several complaints launch and several email sent to Irfan wahab Khan ceo and sigve egarding poor network services specially in internet but no one responded or catered my complaints. I don't know why they are so much irresponsible.
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Muneeb Ahmed Jul 24, 2022 02:16am
Telenor Pakistan network is an irritating network. Several complaints launch and several email sent to Irfan wahab Khan ceo and sigve egarding poor network services specially in internet but no one responded or catered my complaints. I don't know why they are so much irresponsible.
thumb_up Recommended (0)
Muneeb Ahmed Jul 24, 2022 02:16am
Telenor Pakistan network is an irritating network. Several complaints launch and several email sent to Irfan wahab Khan ceo and sigve egarding poor network services specially in internet but no one responded or catered my complaints. I don't know why they are so much irresponsible.
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Zoobi Jul 24, 2022 09:17am
Hamary shahr ma kafi dino sy telenor ki service boht buri ha khas tor py jab light band hoti ha to service e band ho jati ho apny network quality ko bahtar kary no Tu ap ki company band go jay gi aik din Nokia jasa hal ho ga ap ka agr ap na signal net speed ma bahtari na ki Tu
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Hasnain shehzad Jul 27, 2022 09:44pm
Sir g telenor service hamart village Gar Munara (Swabi) may sahee taraa kaam nahi karta hay jab bijlee chalee jaey to signel khatam hi jataa hay sir is per koi action laey
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