Orascom Telecom (OTH) has reported a 3rd quarter profit of US$90.5 million – down 28% on the same period a year ago thanks to lower revenues from its Pakistan subsidiary. The 3rd quarter figure was 12% up on the US$80.4 million in Q2 of this year. Revenues reached US$1.37 billion – barely up on the US$1.36 billion in Q2.
Total subscribers exceeded 79 million, an increase of 22% over September 2007.
Naguib Sawiris, Chairman and CEO of OTH, commented on the results: “Orascom Telecom’s results demonstrate the strong resilience of our business model in increasingly volatile and difficult global economic conditions. Most of our businesses, with the exception of Pakistan, continue to perform on target in terms of growth and profitability. In Pakistan the political, security, financial and economic conditions have been very difficult and we will continue to monitor closely developments in this market, as we will to a lesser extent in Bangladesh, so as to adequately size our future investments,”
OTH continued to grow its subscriber base to over 79 million customers, representing a 22% increase year-on-year. During this quarter, banglalink passed the 10 million subscriber mark, while Tunisiana managed to expand its subscriber base to become the leading player in the market. In Pakistan, Mobilink closed the third quarter of 2008 with 31.4 million subscribers, a 10% increase over the same period of 2007, but a slowdown versus the previous net addition run rates. The slowdown in the net subscriber growth is mainly attributed to impact of the adoption of the new 90-day validity regime and stringent registration policies of the regulator which forced all operators to disconnect those customers that did not register their personal details within a set timeframe.
ARPU has increased in Algeria, Egypt and Bangladesh, and was relatively stable in Tunisia during Q3. The decrease in ARPU in Pakistan is mainly due to the depreciation in the Pakistani Rupee against the US Dollar as well as rising inflation and an increase in sales tax which have further impacted consumer spend.
Aldo Mareuse, Group CFO noted that the company expects its new network in North Korea to become EBITDA positive in the first year of operation thereby significantly reducing the need to inject equity going forward. In Canada OTH has already invested in Q3 2008 a substantial part of its committed expenditure of US$500 – US$700 million and further liquidity requirements are therefore expected to remain relatively limited.
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