Omantel net profit drops 39% on higher royalty fees

Oman Telecommunications Company (Omantel), the Sultanate’s incumbent telecoms operator, has announced its preliminary unaudited financial results for the first half of 2017, reporting revenue of OMR267.7 million (USD692.3 million), a decrease of 0.8% from OMR270.0 million in the year-ago period. EBITDA totalled OMR133.4 million for the six months ended 30 June 2017, down by 4.9% from OMR140.3 million in 1H16, while net profit dropped 38.9% year-on-year to OMR40.8 million. Omantel predominantly attributed the fall in net profit to a rise in royalty rates; effective from 1 January 2017 the Omani government increased the fee payable by telecoms operators from 7% of gross annual revenues to 12%. Omantel paid royalty fees of OMR29.0 million in the first half of this year, compared to OMR17.0 million in the corresponding period of 2016.