Robi beats pandemic blues as its profit requires a leap in second quarter
The second quarter of 2020 will possibly decrease in Robi's annals as one of its pluckiest. The global coronavirus pandemic was at its ferocious worst then, so that it was a given that businesses in all shapes and sizes would have a battering.
But Robi appears to have logged in solid numbers through the 90 days. A year earlier, the operator was in the losses. Now, it is not only in the black, but its profits trebled from the prior quarter.
"The quarter was unlike any other we've lived through," said Mahtab Uddin Ahmed, managing director and chief executive officer of Robi, in a press release yesterday.
The country's second-largest cellular phone operator cited the results as an assortment of cost optimisation drives and lower customer acquisition for the pandemic.
"We are reaping the fruits of a cost rationalisation drive that were only available in January," Shahed Alam, the principle corporate and regulatory officer of Robi, told The Daily Star.
To become a formidable challenger in Bangladesh's mobile landscape, the operator, which is because of get listed, realised it would have to be far more efficient.
"Our razor-sharp concentrate on cost optimisation and less direct cost because of pandemic helped us to get rid of the quarter with a decent profit," Ahmed said.
Alam expects the third-quarter results will be better given the operator will be leaner and meaner.
Another reason is the higher data consumption, which grew 18.9 % from the prior quarter and 23.7 % from a year earlier. Of its 4.8 crore active subscribers, 3.2 crore are internet surfers.
The operator isn't happy though, saying that the pandemic-induced drastic data price reductions resulting in data revenue de-growth of just one 1.5 % compared with the prior quarter.
Its voice call business, which continues to be its bread and butter, was, however, influenced in April and could as the countrywide shutdown that commenced on 26 March meant some of its low-income subscribers were out of work, while its retailers cannot open shops either.
Voice revenue declined 14.2 % compared with the prior quarter and 18.6 % year-on-year.
Robi termed it a sign of "the economical hardship endured especially by the lower income customers who have a tendency to use 2G based voice call service".
The operator clocked in Tk 1,763 crore in revenue, down 9.5 % from the prior quarter and a 5.2 % from a year earlier.
Its total active subscribers stood at 4.8 crore by the end of June, up 0.1 per cent year-on-year and down 3.5 % quarter-on-quarter.
"As anticipated, the impact of pandemic was quite telling on our business," Ahmed said.
The Malaysian Axiata-owned operator though felt its financial performance could have looked better were it not for the tax regime.
In a statement, it said its net profit was "heavily impacted by the discriminatory 2 % minimum turnover tax".
The harsh impact of the pandemic on the business enterprise was further exacerbated because of the increase of supplementary duty by 5 per cent on all SIM services introduced in the cover fiscal 2020-21 unveiled on 11 June, Ahmed said.
The higher SD of 15 %, which took influence on the midnight of 12 June, took the customers' total service tax to 33.25 per cent.
"In fact, the very premise of the budget, which assumes that the telecom sector is awash with cash has been further debunked by the financial data disclosed by other operators. Besides, the lack of support from the federal government to greatly help the industry cushion the blow from the pandemic made the situation all the more painful."
Ahmed continued to laud the Bangladesh Telecommunication Regulatory Commission's move around in June to implement the significant market player regulations on Grameenphone.
"We have now eagerly await tangible outcomes in this regard," he added.
