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Omantel profits soar on back of royalty cut

29 Oct 2007

Incumbent telco Omantel has seen its third quarter profit almost double after a cut in royalties it pays the state and a rise in subscribers to cellular arm Oman Mobile. Net income in the three months to 30 September surged 92% to OMR34.03 million (USD88.41 million), compared with OMR17.69 million for the same period last year.

The royalty cut, which was retroactive to the beginning of 2007, generated about OMR9.8 million of additional profit in the first nine months of 2007, all of it accounted for in the third quarter, according to company spokesman Menon Gopinath.

According to Reuters, that would mean adjusted profit of OMR24.23 million for the third quarter, an increase of 37% year-on-year. An unnamed company official told the news service earlier this month that the royalty cut was expected to generate around OMR14 million extra profit for the whole of 2007. This would imply an extra OMR4.2 million profit in the fourth quarter.

According to Gopinath, the number of mobile users rose 17.4% to 1.43 million in the year to 30 September 2007. About 15% are post-paid customers, generating a monthly ARPU of OMR24. By comparison, pre-paid customers spend around OMR10 per month. The spokesman added that the number of fixed-line customers was unchanged at about 268,000.

Oman, Oman Telecommunications Company (Omantel)

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