Q1 2023: Jazz’s revenue down 20.4pc in USD terms due to PKR devaluation

ISLAMABAD: Despite a 16 percent year-on-year (YoY) growth in overall revenues in local currency, Jazz’s revenue decreased 20.4 percent in USD terms during the first quarter of 2023, mainly due to 47 percent YoY PKR devaluation, said the company.

Additionally, margins were affected by a significant increase in business costs, including 8.3 p.p. YoY increase in interest rates, and a YoY increase of around 80 percent and 32 percent in fuel and electricity costs, respectively.

Despite these macroeconomic challenges, Jazz continues to lead the market with a focus on driving digital inclusion and investing Rs 3.7 billion in the first quarter of 2023 mainly under its “4G for all” ambition, bringing its overall investment in Pakistan to $10.4 billion.

A majority of its capital expenditure during the last year was on the addition of more than 1,000 new 4G sites reflecting the company’s commitment to ensure consistent improvement in the quality of service for its customers.

This network expansion played a key role in increasing Jazz’s 4G customer base by 17.4 percent YoY, reaching 43.1 million, while its overall subscriber base reached 73.7 million.

Jazz CEO Aamir Ibrahim stated, “While we continue to invest in expanding the reach and capacity of our 4G network and driving the digital ecosystem, the financial health of the telecom industry is severely impacted due to an unprecedented rise in the cost of operations - primarily fuel, electricity, interest, and forex rates.

In the current digital emergency, we are seeking urgent policy interventions to ensure that we can continue to provide robust broadband for Pakistan’s growing needs as a digitally progressive country.

This includes delinking the spectrum price from the US dollar, staggering license payments over ten annual installments instead of five, and implementing a regulatory approach to encourage disciplined inflationary pricing.”

The performance of Jazz’s digital services during the quarter solidified its position as the country’s leading digital operator. Its digital financial service, JazzCash, reached 14.6 million monthly active users, served 1.4 million customers with digital loans, and recorded two billion transactions in the last twelve months, with a Gross Transaction Value of Rs 4.5 trillion.

Its self-care app, Jazz World, continued to enjoy strong customer adoption levels, with monthly active users growing by 15.9 percent YoY to reach 12.2 million. Meanwhile, its rapidly growing entertainment platform, Tamasha, witnessed accelerated growth, reaching 5.6 million monthly active users, a 5.6x YoY increase.

Jazz’s focus on customer-centricity and innovation, along with sustained investments throughout its value chain, has led to a consistent growth in revenue market share of around 1per cent per year over the past five years.

Copyright Business Recorder, 2023