Omantel’s Q3 Profit Rise Limited By Costs

Oman Telecommunications (Omantel) posted a slight rise in third-quarter net profit, missing analysts’ estimates as rising costs and losses from a Pakistan unit offset mobile broadband gains and lower asset depreciation.

The former monopoly on Tuesday reported net profit of OMR28 million ($2.6 million) for the three months to Sept. 30, up from OMR27.43 million in the year-earlier period, according to Reuters calculations.

Analysts polled by Reuters on average forecast Omantel would make a quarterly profit of OMR29.88 million.

Quarterly revenue was OMR108.5 million. This compares with OMR109.9 million a year ago.

Nine-month net profit rose 9.2 per cent to OMR90 million, Omantel said in a statement, while revenue increased 2.9 per cent over the same period to OMR342.9 million.

Omantel said a 67 per cent increase in mobile broadband subscribers was the main reason for revenue growth this year, together with rising wholesale revenue, which was up 8.5 per cent year-on-year.

Omantel has fought back against domestic rival Nawras , a unit of Qatar Telecom (Qtel), in part by hosting mobile virtual network operators (MVNOs) Friendi and Renna.

These lease excess capacity, paying wholesale fees and usually a percentage of revenue, while Omantel can also count the MVNOs’ subscribers as its own.

Omantel, which also owns Pakistani operator WorldCall, said its group subscriber base was 3.77 million as of Sept. 30, up 9.8 per cent from a year earlier.

“Loss incurred by Worldcall has slightly impacted group profitability growth,” Omantel said.

Nine-month operating expenses increased 1.3 per cent year-on-year to OMR247.2 million due to a larger wage bill and higher marketing costs and interconnection fees.

Depreciation of plant, property and equipment and amortisation of intangible assets fell by OMR5.9 million, Omantel said, without providing comparative figures.