Riding on double digit revenue growth, Robi Axiata Limited, finished 2019 with a profit after tax (PAT) of Taka 17 crore. Propelled by robust data revenue growth of 28 percent over 2018, Robi ended 2019 with Tk 7,481 crore as total revenue, which is 10 percent higher than 2018. Although the corporate tax rate is set at 45 percent, Robi’s effective tax rate for this year was more than 90 percent.
The effective tax rate went up on the backdrop of Robi making positive PAT in this year. On the whole, raising of the minimum tax rate from .75 percent to 2 percent, doubling of SIM tax to 200 taka, raising of supplementary duty on smartphones from 10 percent to 25 percent, raising of supplementary duty on mobile usage from 5 percent to 10 percent had a major impact of the financial performance of the company.
Besides, the lack of floor price for data continued to weigh heavily on the company; despite explosive growth in data usage, the suicidal pricing competition in the industry in absence of data floor price is not off-setting the revenue losses the company is incurring due to the growing use of Over The Top (OTT) services. In the midst of this mountain of tax structure, Robi ending 2019 on a slightly positive note only goes to show the efficiency at which the company is operating.
Adding 2.1 million new subscribers, the company ended 2019 with a subscriber base of 49 million subscribers, representing 29.6 percent of subscriber market share; compared to 2018, the subscriber base grew by 4.5 percent in 2019. Out of 49 million subscribers, 31.3 million are internet users. Driven by innovative and competitive offers, Robi’s subscriber base grew by 1.7 percent in Q4’19, compared to Q3’19.
Helped by the double digital revenue growth, average revenue per user (ARPU) also increased to 123 taka in 2019; compared to 2018, ARPU grew by 3.7 percent in 2019. Total data usage growth of 95 percent in 2019 was a clear indicator of Robi’s dominance in 4.5G service. The first ever commercial deployment of Dynamic Spectrum Sharing (DSS) supported by machine learning solutions significantly enhanced Robi’s overall network efficiency.
As a result, the Robi customers enjoyed superior data network experience. Quite naturally, the best data experience proved to be a major draw for the subscribers, as five out of every seven person who availed the mobile number portability (MNP) service, opted to join Robi network from other operators.
Robi’s Earnings Before Income Tax Depreciation and Amortization (EBITDA), stood at 2,880 crore taka with a margin of 38.5 percent at the end of 2019. Compared to Q3’19, Robi’s revenue declined by 0.6 percent, EBITDA declined by 17.5 percent, which resulted in a loss of 97 crore taka in Q4’19. EBITDA stood at 595 crore taka with a margin of 31.5 percent in Q4’19.
Additional cost incurred from aggressive sales & marketing drive, settlement of one-off payment to employees who opted to avail the voluntary separation scheme (VSS) raised the cost in Q4’19, which in turn lowered EBITDA.
On the other hand, the seasonal impact on the usage of telecom services, growing usage of OTT services, and the intensive price competition in data services due to the lack of regulation for floor price saw Robi’s revenue in Q4’19 decline by 0.6 percent in Q4’19 compared to Q3’19. Naturally, this weighed down the profit margin for the entire year as well.
Robi has paid 692 crore taka to the Government exchequer in Q4’19 alone. In total, 2,762 crore taka was paid to the Government exchequer by Robi in 2019. Since inception of the company in 1997, Robi has paid 26,621 crore taka to the Government exchequer.
Robi’s focus on improving network quality saw it making CAPEX investment of 557 crore taka in Q4’19. The sustained heavy investment took the total CAPEX investment figure to 1,421 crore taka in 2019. Although, the impact of NOC embargo imposed by the Telecom Regulator was undeniable as the CAPEX investment saw a decline of 31.9 percent in 2019 compared to last year.
Nevertheless, Robi’s total CAPEX investment since inception in 1997 stood at 24,589 crore taka. During the same period, the company has paid only 290 crore taka to the shareholders.
Commenting on the financial performance of the company, Robi’s Managing Director and CEO, Mahtab Uddin Ahmed said: “When we see that five out of seven customers are joining our network from other operators using MNP service, we feel completely justified to claim that we offer the best data network experience in the industry. Aside from our relentless push into expanding the business around 4.5G service, our determined focus on bringing innovation in every aspect of the business helped us to be recognized as a Digital Telco of global standard with a Digital Transformation Index of 7.4, according to the renowned international management consultancy organization, Oliver Wyman.”
“It was also wonderful for us to be recognized as the champion in both Analytics & Artificial Intelligence Maturity in 2019 among all Axiata operating companies across Asia. We can clearly see how our digitalization initiatives are beginning to come together to produce such extraordinary accolades. Therefore, I can confidently say that Robi is very successfully shifting its gears as a company to lead the country in the era of fourth industrial revolution”, he added.