Telenor posts higher revenues
Despite facing increased competition and seeing subscription growth slow, Norwegian firm Telenor’s Myanmar operations have already posted higher revenues this year than all of 2015.
TELENOR is facing “tough competition” in Myanmar, the group’s chief executive Sigve Brekke said in a results presentation yesterday. The Norwegian firm is seeing subscriptions growth in the country slow, but its Myanmar operations have still posted higher revenues so far in 2016 than in the whole of the previous year.
“We’ve seen that [tough competition] for the last three quarters,” Mr Brekke said. “We see very aggressive promotions on on-net traffic, but also on data pricing.”
Telenor competes with Qatari firm Ooredoo and state-owned firm MPT in the Myanmar telecoms market, and a fourth operator now being formed is expected to start its operations next year.
The Norwegian telco added 927,000 new Myanmar subscriptions between July and September to take its total subscriber base to 17.8 million. The rise in subscriptions along with higher data usage provided a 17 percent growth in local currency revenue, partly offset by competition on prices, the firm said.
But the rate at which the mobile operator is adding new subscriptions is falling – it added 1.9 million in the final quarter of 2015, and 1.4 million in the previous quarter of this year.
Mr Brekke said Telenor was continuing to build out its network, passing 100,000 point of sales in the country and adding another 700 network sites to increase its coverage from 78 percent to 82 percent of the population. The firm rolled out 4G coverage this year, and now has 108 4G sites across Nay Pyi Taw.
Telenor is “eagerly awaiting more 1800 [megahertz] spectrum to come out to the market so we can increase our 4G position,” Mr Brekke said. The government is planning a 1800MHz auction in the first quarter of next year, at which MPT and Oordeoo are also expected to bid.
Although Telenor’s subscription growth is slowing, total third-quarter revenue from the company’s Myanmar arm was Nkr1.7 billion (K183 billion; US$145.1 million), up from Nkr1.4 billion in the same quarter of 2015. Myanmar revenues for the first three-quarters of this year were Nkr5.2 billion, higher than the Nkr4.8 billion across the whole of 2015.
The exchange rate between the Myanmar kyat and Norwegian krone has shifted only slightly from 0.0070 kyat to the krone in the first threequarters of 2015 to 0.0069 in the first three quarters of this year, according to Telenor.
Myanmar operating profits were down slightly year-on-year for the third quarter, but again the total operating profit for the first three quarters – Nkr1.6 billion – was greater than the full-year figure for 2015.
Telenor’s expansion into rural areas, however, has seen its average revenue per user (APRU) drop. The APRU for Myanmar was down year-on-year, from Nkr44 in the third quarter of 2015 to Nkr33 in this year’s third quarter.
“APRU in local currency decreased by 28pc, due to increased penetration in rural areas and tougher competitive environment,” the firm said.
But the overall growth in Telenor’s Myanmar operation was one the key drivers of a rise in the group’s total third-quarter revenues, along with higher along APRU in Bangladesh and Pakistan, the firm said. Lower roaming revenues in Scandinavia and “intense competition” in Malaysia and Thailand offset some of the benefits, it added.
Myanmar was also largely responsible for a Nkr2.1 billion rise in the Telenor group’s operating expenses yearto-date, according to the presentation. Capital expenditure in the third quarter was Nkr5.2 billion, driven primarily by 3G and 4G network expansion in Thailand, Norway and Myanmar.
The Telenor logo hangs over a store in downtown Gothenburg’s central station.