Profits fall 90% on the back of Entel Peru launch, MTR cuts

5 Nov 2014

Chilean telecoms group Entel has booked a 1% year-on-year decline in net revenues for Q3 2014, due to falling mobile service revenues in Chile and Peru, whilst rising operations and financing costs led to a 90% drop in net profits, from CLP40.559 billion (USD69.303 million) in Q3 2013 to CLP4.161 billion. Turnover for the period was CLP405.881 billion, whilst EBITDA fell by 21% to CLP92.648 billion, driven by an 8% increase in operating costs to CLP373.300 billion. The slump was attributed primarily to a reduction in mobile service revenues from Chile, which fell 12% y-o-y to CLP278.752 billion, impacted by a 75% reduction in mobile termination rates (MTRs). Although post-paid subscriptions continued to expand, the growth failed to offset declines in the pre-paid and mobile broadband sectors, leading to an overall decline of 3% in the cellco’s user base to 8.681 million. Entel’s higher costs for the quarter were partly due to the consolidation of the Peruvian mobile unit (higher salary expenses), and the higher sales and marketing activity associated with the cellco’s brand launch: Entel rebranded its Peruvian mobile arm from Nextel del Peru to Entel Peru last month.

Chile, Peru, Americatel Peru (Entel Empresas), Entel Chile, Entel Peru