Telecom operator Robi said yesterday it might have to backtrack on the plan of an initial public offering (IPO) in the near future if the company is to pay huge sums on licence renewal.
Robi has seen its revenue jump to record levels in the third quarter of 2010, but it fears a return to losses if it has to defray so much in the renewal of licences.
On the recent media reports that four telecom operators have to pay a combined Tk 14,000 crore for licence renewal next year, Robi CEO Michael Kuehner said yesterday: “We are quite concerned and unhappy with what we heard lately.”
However, the telecom regulator is yet to inform the operators of the amount to be needed for licence renewal.
“Even from an IPO perspective, the move is quite discouraging,” he said at a press conference on third quarter financial review of the operator, at Dhaka Sheraton Hotel.
“Defraying such a high amount could take us back to the loss making territory and no shareholder would be interested in investing in a loss making company.”
According to the media reports published earlier this month, the four operators — Grameenphone, Banglalink, Robi and Citycell — will have to pay a combined Tk 28,000 crore in frequency charges over the next fifteen years, half of which would have to be paid during the licence renewal next year.
As a result of the new directive, it is estimated that Grameenphone has to pay around Tk 7,000 crore during licence renewal, while Robi and Banglalink would each pay around
Tk 3,000 crore and Citycell around
Tk 1,000 crore.
The Robi CEO called the numbers “outrageous”.
“With that sort of investment in licence renewal alone, it would be literally difficult for us to go very strong in 3G as well.”
“With the amount being so high, we will also find difficulties in raising funds, given the limitations of the country’s banks,” Kuehner added.
The recently re-branded company generated revenues worth Tk 690 crore in the third quarter this year, rising from Tk 490 crore in the same period last year.
The company’s average revenue per user and minutes of use per user was also quite stable, while earnings before interest, taxes, depreciation and amortisation (EBITDA) was up by 41 percent from the same time in 2009, company statistics show.
“The revenue was primarily boosted by prepaid voice, prepaid VAS (value added services) and IDD (international direct dialling) revenue share from other operators and international gateways, while the strong subscriber growth of 41 percent in the meantime also helped maintain the momentum,” said Robi Chief Financial Officer Mahtab Uddin Ahmed.
The most notable growth was in the profit-after-tax during the first nine months this year, which rose to Tk 80 crore from Tk 15 crore during the same period last year. The growth was attributed to EBITDA and efficient fund management.
The company is planning to invest around $12.2 million this year and a significant focus for the telecom operator will be to invest more in data services, said the officials.
“Currently, 20 lakh subscribers are using our internet or data services and our target is to double the number in 2011,” said Chief Marketing Officer Bidyut Kumar Basu.
The company invested $40 million in modernising its network, including 1,033 base stations, the officials said.
It posted net profit after tax worth |Tk 39.7 crore in the third quarter of 2010, compared to a loss of Tk 47.2 crore in the same period last year.
