Nepal Telecom posts profit of over Rs 5.59 billion but revenue falls

Nepal Telecom (Ntc) has posted an unaudited financial report for the third quarter (Q3) of the current Fiscal Year FY 2080/81. The report highlights the company’s continued difficulties with revenue generation but has earned a profit of over Rs 5.59 arba (billion) staging a healthy increase of over Rs 18 crore. Here, we have all the details.

Nepal Telecom generated a total of Rs 31 arba, 20 crore, 48 lakh, and 58 thousand (Rs 31 billion, 204 million, 858 thousand) in revenue till the third quarter (till Chaitra, 2080) of the current Fiscal Year FY 2080/81. It’s a decline of Rs 2 arba, 37 lakh, and 7 thousand (Rs 2 billion and 707 thousand), or by 6.03%. To compare, in Q3 FY 2079/80 (till Chaitra, 2079), the company brought in Rs 33 arba, 20 crore, 85 lakh, and 65 thousand (Rs 33 billion, 208 million, 565 thousand).

Ntc endured another decline in its total operating revenue

Likewise, the decrease in total revenue also translated into the company’s total operating revenue (TOR). Till Q3 FY 2080/81, the company produced Rs 25 arba, 48 crore, 12 lakh, 89 thousand (Rs 25 billion, 481 million, 289 thousand). Compared to the same period of FY 2079/80, the TOR fell by Rs 1 arba, 86 crores, 53 lakh, and 58 thousand (Rs 1 billion, 865 million, 358 thousand). Till Q3 FY 2079/80, the company generated 27 arba, 34 crores, 66 lakh, and 47 thousand (Rs Rs 27 billion, 346 million, 647 thousand) in TOR.

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Nepal Telecom profit report for Q3 FY 2080/81

Despite the falling revenue, the company managed to increase its profit. Till the third quarter of FY 2080/81, Nepal Telecom (NTC) earned Rs 5 arba, 59 crore, 37 lakh, and 68 thousand (Rs 5 billion, 593 million, 768 million) in profit. It’s a growth of Rs 18 crore, 17 lakh, 93 thousand (Rs 181 million, 796 thousand) or 3.63% against the same period in FY 2079/80. The company turned in Rs 5 arba, 41 crore, 19 lakh, and 74 thousand (Rs 5 billion, 411 million, 974 million) in profit till the same duration in FY 2079/80.

Likewise, Ntc’s earnings per share stands at Rs 41.44 at the moment. The company has over 91.49% of its investment from the government.

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Reasons for Ntc revenue changes in Q3 FY 2080/81:

Nepal Telecom has identified the following reasons for the changes in its revenue and profit in Q3 FY 2080/81:

• Increasing use of OTT services harming interconnection revenues by Rs 94 crore, 49 lakh, and 29 thousand.
• Having made emphasis on service expansion and upgradation in remote and rural areas with less prospect of less financial gain.  
• Changes in service tariffs have adversely affected the company’s revenue generation.
• Fall in income from financial income by Rs 74 lakh due to the changes in bank interests.

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The latest report is another reflection on the company’s struggles with its revenues. Lower costs of data, less use of voice, cut-throat competition with Ncell, service expansion, infrastructure maintenance, etc. have affected the company’s financial aspects. However, this time, it managed to increase its profit despite lower revenues. Telecom companies face a handful of challenges in Nepal and Ntc is not exempt. But, being a “national telco”, it has obligations to put service over priority and engages in various initiatives such as the Mid-Hill optical fiber project to promote digital inclusion. Let’s hope the situation reverses in the coming days which is beneficial for the entire country as well as the national economy.