Nepal Telecom sees a 42 per cent dip in annual profit

Nepal Telecom sees a 42 per cent dip in annual profit
Published: 18 August 2019 - 7:04 a.m.

State-owned telecommunications provider Nepal Telecom (NT) has reported a 41.6 per cent decline in full year net profit for its 2018-2019 financial year. Revenue fell by 3.9 per cent to NPR43.4 billion and EBITDA 8.7 per cent to NPR24.3 million.

According to the company, the losses are due to licence renewal fees, foreign exchange effects and falling revenue caused by the popularity of OTT services. In particular, the backdated licence fee payment of NPR4 billion negatively impacted profits, which was the first of five annual installments totaling NPR20 billion. NT's employee trade union has previously argued that the fee places a massive financial burden on the company and therefore it should be reduced.

Meanwhile, the operator noted it is expanding its 4G mobile network and fiber broadband services across the country. This is to address the challenging business environment.

Smart Telecom, Nepal's third largest mobile network operator has agreed to pay the NTA NPR300 million of the total NPR2.6 billion it owes in outstanding fees within 15 days. The move follows the regulator's repeated threats to rescind the licence of any operator that fails to pay money owed for licence renewal, spectrum awards and other obligations. The regulator has likewise told local wireline operator Nepal Satellite Telecom to pay NPR70 million or risk having its licence revoked. The company owes almost NPR1 billion in outstanding fees.

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