State-backed telecom operator Nepal Telecom (NTC) has published its unaudited financial report for the third quarter (Q3) of fiscal year FY 2079/80. The report highlighting the company’s financial indicators of the first nine months (till the end of Chaitra, 2079), shows that the telco saw its operating revenue and profit decline which it blames on OTT, interconnection, telecommunication service charges (TSC), maintenance costs, etc. for the low returns.
According to the report, Ntc saw its total operating revenue decrease by Rs 87 crore, 29 lakh, and 64 thousand. The figure stood at Rs 27 billion, 34 crores, 66 lakh, and 47 thousand. Last fiscal year for the same period (Till Chaitra 2078/79), its total operating revenue was Rs 28 billion, 21 crores, 96 lakh, and 12 thousand.
| Ntc total operating revenue from Q3 FY 2079/80 Report | Ntc total operating revenue from Q3 FY 2078/79 Report | Difference |
| Rs 27,34,66,47,000 | Rs 28,21,96,12,000 | Rs 87,29,64,000↓ (3.09%) |
Similarly, the telco also endured a slight loss in profit during the same period as the report shows. Last year, the company drew in Rs 5 billion, 43 crores, 53 lakh, and 46 thousand in profit. The figure dropped this term by Rs 2 crore, 33 lakh, and 71 thousand (0.43%) as the company generated a total profit of Rs 5 billion 41 crores, 19 lakh, and 74 thousand.
| Ntc profit from Q3 FY 2079/80 Report | Ntc profit from Q3 FY 2078/79 Report | Difference |
| Rs 5,41,19,74,000 | Rs 5,43,53,46,000 | Rs 2,33,71,000↓ (0.43%) |
However, the company increased its total revenue
However, the telco did have a positive outcome in its total revenue. During the first nine months of the current FY, Ntc posted total revenue of 33 billion, 20 crores, 85 lakh, and 65 thousand marking an increase of Rs 67 crore, 18 lakh, and 35 thousand. It was an increase of 2.06%. During the same period last FY 2078/79, the telco brought in Rs 32 billion, 53 crores, 67 lakh, and 29 thousand in total revenue.
| Ntc total revenue from Q3 FY 2079/80 Report | Ntc total revenue from Q3 FY 2078/79 Report | Difference |
| Rs 33,20,85,65,000 | Rs 32,53,67,29,000 | Rs 67,18,35,000↑ (2.06%) |
Also read: Nepal Telecom earns 4 billion profit | Revenue declines in second quarter of FY 2079/80
Reasons for change in Ntc profit in Q3 FY 2079/80
Ntc has pointed to the factors below for the decline in its profit:
1.1 Increase in operating income:
- Increase in the use of data services, leading to the increase in GSM data service of about Rs 77 crore, 50 lakh, and 26 thousand.
- Decrease in domestic interconnection tariffs as per the interconnection directives and decrease in expenses for the service.
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1.2 Decrease in operating revenue:
- A decrease in interconnection tariffs as per the interconnection directives, and an increase in OTT services contributed to the loss of Rs 57 crore, 58 lakh in interconnection revenue.
- Damages to the company’s structures during infrastructure construction, maintenance, and relocation works carried out by municipalities and wards.
- Revenue is being affected due to the change in telecommunication service charges (TSC) as per the Economic Act, 2079. Related: New Ntc Service Tariffs After the 3% TSC Cut
- More expenditure is shown in impairment as per the company’s accounting policy and calculation from NFRS.
1.3 Changes in non-operating revenue:
- Due to the change in bank interest rates, the financial income increased by Rs. 1 billion 73 crore 99 million.
- About Rs. 5 crore 46 lakh earned from the foreign exchange due to the change in the foreign exchange rate.
