PHONE ARENA

Grameenphone Ltd. reported BDT 7,473 crore revenues for the year 2010 with 14.4% increase from 2009. The growth was mainly from voice as well as interconnection revenues driven by subscription growth and revenues from sale of mobile devices. Data revenue also has contributed to this strong revenue growth for the year 2010 which increased by 64.0% from 2009. Total revenue for the fourth quarter of 2010 was BDT 1,959 crore, up by 17.0% from the fourth quarter of 2009.

“A year of remarkable performance when it comes to GP’s revenue and subscription growth and we have reached just about 3 crore subscriptions at the end,” said Oddvar Hesjedal, CEO of Grameenphone Ltd. He added, “We diversified our business by forming Grameenphone IT Ltd., strengthened our rural footprint through ‘Baadhon’ product bundled with low cost handsets and continued to be top on the innovation front through segmented price plans, mini-packs for economy data users and services like e-ticketing and vehicle tracking.”

The company has added 67 lakh new subscriptions during the year, holding on to the market leadership by serving about 44% of the mobile market.

While speaking about GP’s subscription growth, Oddvar Hesjedal said “the SIM tax continues to be a significant barrier for the industry where operators, for the sake of industry growth, are taking dents in profitability by subsidizing the SIM tax.”

Net profit after taxes for 2010 was BDT 1,071 crores with 14.3% margin compared to BDT 1,497 crores with 22.9% margin of 2009. The fall was mainly due to subsidy on SIM tax of BDT 680 crores, partly offset by revenue growth. This has also pushed the EBITDA margins down to 49.5% for 2010 compared to 57.0% of 2009. Earnings per share (EPS) for 2010 stood at BDT 7.93 compared to BDT 12.08 for 2009. Notably, 2009 EPS was higher due to a positive adjustment of BDT 412 crore in income tax after successful listing into the stock exchanges. (Without that one-time adjustment, 2009 EPS would have been BDT 8.75.)

During the year 2010, Grameenphone invested BDT 846 crores for network quality and data capacity enhancement and modernization while contributed BDT 3,715 crores to the National Exchequer. Grameenphone paid BDT 900 crores against corporate taxes in 2010, which was BDT 250 crore more compared to 2009.

Grameenphone Ltd. has been awarded the credit rating of AAA for long-term and ST-1 for short-term by The Credit Rating Agency of Bangladesh (CRAB).

Along with three other mobile operators, GP’s mobile cellular license will expire on 10 November 2011, in view of which, regulators have published a renewal framework on 19 January 2011. Grameenphone is evaluating the guidelines as per the framework and will provide feedback to the regulators as per agreed timeline.

The 2G renewal fees and astronomically high price of spectrum allocation proposed by the regulator is unheard of in the world and makes the telecom business in Bangladesh and future dividends to shareholders uncertain. Grameenphone CEO noted, “We believe Grameenphone and the regulators will be on a common platform when it comes to license renewal and spectrum pricing to secure the best interest of general people, especially from the remote and rural areas”.

Grameenphone has so far been reinvesting most of its earnings for business expansion. Keeping in mind the shareholders’ right on retained earnings and future uncertainties involving the telecommunication industry of Bangladesh, the Board of Directors of Grameenphone Ltd. have recommended final dividend for the year 2010 in cash at the rate of 85% of the paid up capital (i.e. BDT 8.5 per share) based on the decision taken at the Board Meeting held on 6 February 2011. With this, the total cash dividend stands at 120% for the year 2010 inclusive of 35% interim cash dividend (i.e. BDT 3.5 per share) that was declared in July 2010 based on company’s half-yearly performance and has already been paid. The Shareholders as of the record date of 20 February 2011 will be entitled for this dividend while the date of AGM has been fixed on 19 April 2011.