Omantel net profit down 2.5% as expenses rise 5.4%

9 May 2013

Oman Telecommunications Company (Omantel), the Sultanate’s incumbent telecoms operator, has announced its financial results for the first quarter of 2013, reporting a 3.1% year-on-year increase in revenue to OMR114.5 million (USD296.5 million). Net profit totalled OMR29.1 million in Q1 2013, down 2.5% from OMR29.9 million in the year-ago quarter. The company attributed the fall in net income to the expansion of its 3.5G, 4G LTE and fixed next generation networks, which put pressure on operation and maintenance and depreciation expenses. Operating expenses increased 5.4% year-on-year to OMR83.9 million in the first three months of 2013, mainly due to an increase in external administration expenses to OMR6.6 million, on account of increased international retail minutes, while employee-related costs also rose. Total Omantel subscribers (including Pakistani subsidiary Worldcall Telecommunications) reached 3.883 million at the end of March 2013, an increase of 7% from 3.627 million a year earlier. The firm’s domestic subscriber base increased 9.7% year-on-year to 2.956 million, with growth mainly driven by its mobile business, which saw a 10.1% rise in customers to 2.6 million.

Commenting on the results, Omantel’s CEO Dr. Amer Awadh Al Rawas said: ‘We are proud to see our company making a good growth despite the challenging market conditions and increased competition in the domestic market. As we are continuously working on providing our customers enhanced customer experience, Omantel made huge investments to expand the reach of its network and roll out the new state-of-the-art network and the second carrier on 3.5G network… These investments along with increased employee costs and increase in external administration costs have contributed to an increase in expenses by 5.4% therefore impacting the company’s net profit which has marginally decreased by 2.5% compared to the first quarter of 2012.’

Oman, Oman Telecommunications Company (Omantel)