Ncell has retained “A” credit ratings from ICRA Nepal. The company received the long-term rating of [ICRANP] LA to the long-term loans and a short-term rating of [ICRANP] A to the enhanced short-term loan limits of the leading private operator. The rating agency assigned the ratings for the telco for its comfortable financial health despite its moderate financial gains in recent years.
Statistically, Ncell registered a Total Operating Income of close to Rs 60 billion in FY 2018. The figure has been continuously decreasing over the years. In FY 2021, the private telco reported an Operating Income of Rs 40 billion, 42 crores, and 40 lakhs.
| Ncell financial indicators | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
| Operating Income (Rs million) | 59,817 | 55,398 | 46,874 | 40,424 |
| OPBITDA (%) | 62 | 57 | 54 | 56 |
The ICRA report further highlights Ncell’s declined revenue market share in the last three years. Ncell occupied a market share of 64% in the revenue market share in FY 2019 but decreased to 56% in FY 2021 for GSM services. The report also says that Ncell boasts the majority of the market share in industry revenues with still strong ARPU, however, it also points out that the “steady trajectory of mismatch in subscriber base growth” is a concern. Ncell’s ARPU stood at Rs 205, declining by 17% in 2021.
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ICRA reports Ncell witnessing low ARPU
ICRA Nepal reports that Ncell has seen voice ARPU decrease with the increase of broadband internet. The report says this has been large to the shrinking ILD revenues. Meanwhile, the local voice revenues also reported slight ‘degrowth’ of 3% from FY 2018 to FY 2021.
Similarly, the company’s data ARPU tumbled along with a market share in the 3G/4G subscriber base. The company only accounted for 41% of the GSM subscriber base, which was 43% in ICRA’s previous rating.
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Ncell reported a moderate 37% Compound Annual Growth Rate (CAGR) in the 4G subscriber base over the 21-month period ending in mid-April 2022. The report says the figure has “impacted Ncell’s revenue performance for FY 2021.” The company saw a 14% degrowth in overall revenues.
“The company’s incremental performance in this front would remain a key monitorable and a further sustained trend in a reversal of market share could exert a downward pressure over the ratings,” ICRA’s report reads.
Ncell became part of Axiata Group Berhad in 2016 following the group’s acquisition of 100% shares of Reynolds Holding Limited of West Indies which held 80% stakes in Ncell. The remaining 20% stakes are held by Sunivera Capital Venture Private Limited of Nepal.
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