COVID-19 takes toll on telcos’ revenue

Both Nepal Telecom and Ncell report sharp decline in revenues

August 31, 2020, 09:56:22 AM |

KATHMANDU: The COVID-19 pandemic has had an adverse effect on the revenues being generated by the country’s telecommunication sector.

Financial statements published recently by Nepal’s two telecom giants—Nepal Telecom (NT) and Ncell— have shown that both firms witnessed significant drop in their revenue due to the COVID-19 shocks.

The financial statement of the last three months published by Ncell reveals that the company’s profit declined by 75 percent in the first six months of 2020 compared to the same period last year. Though Ncell posted net profit of Rs 9.36 billion in the first six months of 2019, the company’s profit fell to Rs 2.37 billion in the first half of 2020.

As compared to the previous year’s quarter, Ncell’s revenue declined by Rs 4.786 billion this year.

Ncell’s revenue from voice services decreased by almost 24 percent and that from international calls declined by 17.5 percent. Meanwhile, its revenue from data has increased, as per the financial statement. In the second quarter of 2020, Ncell’s revenue from data reached 28 percent of its total revenue though the company’s revenue from data during the same period last year was only 22 percent.

Similarly, the financial statement of Nepal Telecom, which was published two weeks ago has also shown significant decline in the company’s revenue. NT’s net profit declined by two-third in the last quarter of last year, as per the report. The company’s net profit fell to Rs 990 million during the period.

The telecom reported a sharp drop in revenue from voice services following increasing usage of over-the-top services instead of direct phone calls. While the revenue from voice services fell by Rs 2.16 billion in the last fiscal year, revenue from services including international roaming declined by Rs 540 million, the company said.

However, NT’s revenue from data services has increased by Rs 750 million in the last fiscal year. The decline in revenue and profits from roaming services due to the COVID-19 pandemic as well as a 30 per cent discount on voice and data services during the lockdown period as per the government’s directive led to a decline in revenue and profits, as per NT.