Pecentage changes in selected operator performance H108

Research conducted by Comm. telecoms publication shows that while revenue growth for operators in the Gulf region remains in double digit figures, net profits are being squeezed significantly, with two operators on Comm.’s list of eight regional service providers actually reporting a fall in profitability between the first half of 2007 and the first half of 2008.

Comm. compared the first half-2008 results of eight mobile and telecoms providers across the Gulf and north Africa with their performance for the same period a year earlier. This exercise revealed that while organic and inorganic growth is spurring top line growth, the effects of increased competition and lower average marginal revenue per user (AMPU) is squeezing net profits.

All of Comm.’s calculations were based on local currencies in order not to distort comparisons given the slide of the US dollar against global currencies in the last year.

Omantel topped the list, recording the highest year-on-year growth in net profit between the first half of 2007 and the first half of 2008. The Omani incumbent achieved an increase in net profit amounting to 54.23 per cent over the period. This was in comparison to a 14.33 per cent rise in revenues at the telco over the same period, the net profit improvement being attributed to strong growth in mobile and broadband services.

At the other end of the scale, Batelco recorded the largest fall in year-on-year net profit, amounting to negative 2.86 per cent between the first half of 2007 and the corresponding period in 2008. Even the telcos chairman, Sheikh Hamad Abdulla Al Khalifa acknowledged the highly competitive operating environment in Bahrain, noting that with 69 licensed operators in the kingdom, Batelco continues to review its operating strategies in order to retain its market share.

Source: Comm. and company results