Grameenphone says revenues hit by competition, regulations and unrest

Grameenphone, Bangladesh’s largest mobile operator, said its third quarter revenue growth was hit by increased competition and lower call charges, while government regulation and public unrest also had a negative effect on its business, reports local paper the Daily Star. As of 30 September 2007 the number of Grameenphone subscribers was up 5.7 million year-on-year and the company claimed an estimated 59% market share, but it said average revenue per user (ARPU) decreased by 29% year-on-year ‘primarily due to decreasing average prices’. Jon Fredrik Baksaas, president and CEO of the cellco’s Norwegian parent Telenor, added that: ‘Lately, governmental regulations and public unrest have negatively impacted Grameenphone’s business conditions.’ Grameenphone said its EBITDA margins had decreased mainly due to a one-time compensation to the government of around USD27 million for revenues lost due to the illegal use of Grameenphone’s network facilities by ‘customers illegally transferring international calls’ over VoIP platforms. The third quarter also marked a sharp increase in capital expenditure, as the company invested in its network to cope with increased usage and to maintain the quality of services, it said.