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Omantel net profit drops on rising expenses

10 Nov 2010

Oman’s incumbent telecoms operator Omantel has announced its results for the nine months ended 30 September 2010, reporting a 21.6% fall in net profit to OMR83 million (USD214 million), compared to OMR105.8 million in the same period a year earlier. The company attributed the drop to an increase in expenses, driven by a surge in investment for network expansion, the rollout of an IP core intelligent network and the deployment of other new technologies. Omantel added that net profit for Q3 2009 included the settlement of an insurance claim and a reversal of bad debts. The company’s expenses reached OMR224 million in the first nine months of 2010, up from OMR191 million in the year-ago period, due to expansion of its 3.5G network and depreciation resulting from the launch of new technologies. Meanwhile, the operator’s revenue for the first nine months of 2010 rose 3.9% year-on-year to OMR316 million, thanks to an increase in domestic retail revenue of 2%. At 30 September 2010 Omantel reported a total subscriber base of 3.303 million, up 10.3% year-on-year. Of that total, around 852,000 were customers of Worldcall Telecom, Omantel’s Pakistani unit, reflecting a 7.6% increase compared to 30 September 2009. The company did not disclose its domestic subscriber figures, but did report that Oman’s overall wireless user base has grown by 20% compared to Q309, of which the firm’s wireless unit, Oman Mobile, achieved 66% of net new subscribers.

In a separate story, Reuters reports that Omantel will seek shareholder approval to serve as a guarantor to obtain funding for Worldcall. The Pakistani operator has requested USD70 million in funding for capital expenditure and to meet liabilities, but was unable to independently obtain the required financing. According to TeleGeography’s GlobalComms Database, Omantel acquired 65% of Worldcall in May 2008 for USD193 million, having announced plans to purchase the stake almost a year earlier, in August 2007.

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