Despite encouraging growth in terms of both subscriber and revenue, mobile operator Robi was unable to register any profit in 2017.
Alongside continued investment for network development, a number of market and regulatory factors forced the company to incur heavy net loss of Tk280 crore in 2017, according to a press note issued on Thursday.
The intensification of market competition around pricing for both data and voice, made the financial results particularly bleak for the company in 2017. The existing unfair pricing structure created room for predatory pricing and cross-subsidy. Such anti-competitive market practices are helping to deepen the existing crisis with regards to the prevailing unhealthy market competition.
On top of this, the exorbitantly high taxation regime is putting further strain on the financial results of the smaller players. As the country gets ready for 4G era, the dire financial reading of Robi indicates the diminishing power of the mobile operators to finance the ensuing digital revolution in the country.
During the year, the company delivered a strong 26.8% growth in subscriber base over 2016 to reach 42.9 million, adding 9.1 million new subscribers which represents 29.6% subscriber market share. Innovative product offerings, effective dual brand strategy and superior data network experience enabled Robi to deliver a strong growth in subscriber base.
Robi achieved a strong revenue growth of 29.7% YoY to reach Tk6,830 crore in 2017 driven by the successful merger with Airtel. YoY data revenue also witnessed a strong growth of 89.1%. Data revenue growth was propelled by nationwide smooth network integration after merger coupled with innovative data offerings to drive data usage.
In 2017, EBITDA margin (Operating Profit) stands at 19.0% impacted primarily by higher network operating costs and intense price competition. Robi incurred Tk280 crore net loss after tax in 2017 due to continuous capital investment in nationwide network modernization, significant OPEX, high regulatory cost and sector specific taxation.
Robi successfully added 1.7 million new subscribers in Q4’17 to reach 42.9 million. QoQ revenue grew by 6.4% to Tk1,860 crore. Data revenue recorded solid 14.7% growth facilitated by the innovative platforms such as ‘MyPlan’ which gives flexibility to customers to customize data and voice products according to their choice. QoQ EBITDA decreased by 3.8% to Tk370 crore in Q4’17 mainly for investing in market front. Robi incurred net loss after tax Tk130 crore in Q4’17 mainly for one-off adjustment relating to de-consolidation of edotco.
In Q4’17 the company witnessed solid growth in revenue (YoY +27.8%). Robi achieved operating profit (EBITDA) margin of 20.1% in Q4’17. It incurred net loss after tax Tk130 crore in Q4’17 mainly for continuous investment in nationwide network upgradation.
Robi continued investing aggressively to ensure 4G readiness and fast-track its 3.5G network expansion aiming to improve network quality and enabling better customer experience both in voice and data services. Total CAPEX investment made by Robi since inception amounted to Tk20,670 crore inclusive of Tk1,120 crore CAPEX investment in the fourth quarter of 2017.
The company has network coverage in all 64 districts in Bangladesh through over 10,650 sites of which over 9,200 are 3.5G sites.
Robi Managing Director and CEO, Mahtab Uddin Ahmed said, “Robi is on its way to becoming the number 1 network of Bangladesh. With 4G and MNP coming up, we are confident that we can provide significantly better customer experience in terms of data speed and stronger network to our subscribers.
With Airtel on board as the ‘youth brand’ and Robi as the ‘digital brand’, we have successfully increased our subscriber base by 26.8% in 2017.”
Besides network expansion, Robi is continuously bringing innovative digital solutions and enabling its customers to use different online and social platforms at an affordable price. During the fourth quarter of 2017, Robi launched ‘iflix’, an OTT platform with video on demand service.
Robi also launched ‘MyPlay’, the largest gaming platform in the country and ‘Myhealth’ Combo, a healthcare service. All these digital product offerings reinstate Robi’s brand image of being a ‘digital and innovative brand’. Robi also launched ‘Bijoy Itihash’ app in December 2017 in order to spread knowledge regarding the nation’s independence, further establishing itself as the ‘national brand’.
In Q4’17, the company contributed Tk760 crore to the Government Exchequer representing 40.7% of company revenue. Since inception in 1997, Robi has paid more than Tk20,780 crore to the Government Exchequer while for the same period remitted Tk290 crore dividends to its shareholders.