Merger-related costs have forced Robi to incur a hefty loss of BDT 1.7bn at the end of Q 1 2017. The high taxation regime coupled with heavy investment demands is putting tremendous strain on the company’s cost structure, discouraging sustained investment. Although the network integration work is going on smoothly, the absence of tech-neutrality facility is making it difficult to ensure expected Quality of Service.
YoY PERFORMANCE (Q1 17 vs Q1 16)
After successful completion of Robi-Airtel merger in November 2016, year 2017 started with an expectation to provide best customer service in the country. Meeting the expectation, Robi 
was able to add another 2.4 million new subscribers in Q1 17 to reach 36.2 million, representing 27.5% subscriber market share.
During the period, the company witnessed encouraging growth in both voice (YoY +25.2%) and data revenue (YoY +83.0%) driven by the merger resulting in overall revenue growth (YoY +30.7%). Data revenue growth was propelled by significant investments in network coupled with customer-oriented data offerings to drive 3.5G and 2.5G data usage. Robi achieved operating profit (EBITDA) margin of 17.7% in Q1 17, which is lower than the same period of previous year mainly for higher operating expenses resulting from the merger. Due to continuous investment in nationwide network modernization Robi is behind the expected profitability.
QoQ PERFORMANCE (Q1 2017 vs Q4 2016)
Robi witnessed 7.0% subscriber growth in Q1 17 standing at 36.2 million driven by successful Robi-Airtel merger. QoQ revenue increased by 6.3% to BDT 15.5 billion with promising growth in both voice and data. QoQ EBITDA improved by 4.8pp to BDT 2.7 billion in Q1 17; EBITDA margin 17.7%. Robi’s profitability was negative impacted by additional network maintenance costs resulting from airtel sites.
INVESTMENT IN MOBILE NETWORK INFRASTRUCTURE
Robi continued investing aggressively to fast-track its 3.5G network expansion and improving 2.5G network quality for better customer experience both in voice and data services. Total CAPEX investment made by Robi since inception amounted to BDT 186.7 billion inclusive of BDT 4.1 billion CAPEX investment in the first quarter of 2017. The company has network coverage in all 64 districts in Bangladesh through over 12,000 sites, of which over 7,900 are 3.5G sites.
COMMENTARY
Robi Managing Director and CEO, Mahtab Uddin Ahmed said, “Year 2017 started with an expectation to provide the widest mobile network coverage and superior mobile services experience to our subscribers. We have successfully completed network integration in 12 regions covering 50% of Airtel subscribers.
During the first quarter of 2017 we continued to bring most innovative and affordable product offers in the market. For Airtel brand we set out to bring the youth community closer through a social circle named “Yolo”. Members of this exclusive circle will be able to enjoy unbeatable call rates and internet packs. We also launched a user-friendly payment solution mobile app “RobiCash” which provides utmost convenience in making payment of utility bills, Easyload and purchasing of train tickets.”
PAYMENT TO STAKEHOLDERS
In Q1 2017, the company contributed BDT 6.8 billion to the Government Exchequer representing 44.0% of company revenue. Since inception in 1997, Robi has paid more than BDT 185.6 billion to the Government Exchequer while for the same period remitted BDT 2.9 billion dividends to its shareholders.
ABOUT ROBI:
Robi Axiata Limited is a joint venture of Axiata Group Berhad (Malaysia), Bharti Airtel Limited (India) and NTT DoCoMo Inc. (Japan). The entity ‘Robi Axiata Limited’ has merged with Bharti’s operation in Bangladesh ‘Airtel Bangladesh Limited’ in November 2016 to form the new entity where Axiata holds 68.7% controlling stake, Bharti holds 25.0% while the remaining 6.3% is held by NTT DOCOMO of Japan. The merged entity is the second largest mobile phone operator in Bangladesh with 36.2 million active subscribers.
