As expected, Corona pandemic ravaged Robi’s financials in Q2’20. Compared to Q1, the Q2’20 revenue declined by 9.5% to reach 1,763 crore taka at the end of the second quarter. Cost optimization drive coupled with pandemic time less customer acquisition and revenue driven cost helped Robi register a profit after tax (PAT) of 58.4 crore in Q2’20.
KEY HIGHLIGHTS – Q2’20
- Active Subscriber-base: 4 crore 80 lakhs [Representing 29.7% of subscriber market share]
- Internet Subscribers: 3 crore 22 lakhs internet subscribers [Which is 67% of total subscriber base]
- Revenue: 1,763 crore taka
- Earnings Before Income Tax Depreciation and Amortization (EBITDA): 882 crore taka
- Capex investment: 311 crore taka
- Profit After Tax (PAT): 58.4 crore taka
- Contribution to Government Exchequer: 804.3 crore taka [Representing 45.6% of Robi’s total revenue for the quarter]
While reading the PAT figure, it must be noted that it is heavily impacted by the discriminatory 2% minimum turnover tax. The smaller players in the telecom industry is effectively made to pay minimum turnover tax at double the rate compared to any other industry.
In addition to the revenue dent, the active subscriber base took a heavy beating throughout the second quarter due to the pandemic. Active subscriber base declined by 3.5% compared to Q1’20 to reach 4 crore 80 lakhs in Q2’20.
Compared to the same quarter last year, the active subscriber base increased by 0.1%. Robi’s revenue on the other hand declined by 5.2% compared to the same quarter last year.
Robi’s voice revenue declined by 14.2% compared to the previous quarter and by 18.6% compared to the same quarter previous year- indicating the economic hardship endured especially by the lower income customers who tend to use 2G based voice call service.
Despite data consumption growth of 18.9% compared to last quarter, the pandemic induced drastic data price reduction resulted in data revenue de-growth of 1.5% in Q2’20 compared to the previous quarter; however, compared to same quarter last year, data revenue grew by 23.7% in Q2’20.
Sudden increase in data usage during the pandemic naturally stretched the network performance which could easily have been avoided with the emergency allocation of spectrum as requested by the smaller operators of the industry.
The pandemic reduced Robi’s active subscriber base by 17 lakhs in Q2’20 to slide down to 4 crore 80 lakhs representing 29.7% of the subscriber market share. Out of 4 crore 80 lakhs active subscribers, 3 crore 22 lakhs are internet users- which represents 67% of Robi’s total subscriber base. Sharp focus on cost optimization helped Robi to register EBITDA of 882 crore taka in Q2’20.
Robi has paid 804.3 crore taka to the Government exchequer in the second quarter of 2020. Robi’s CAPEX investment in this quarter was 311 crore taka.
Commenting on the financial performance of the company, Robi’s Managing Director and CEO, Mahtab Uddin Ahmed said: “Q2’20 was unlike any other quarter we have lived through. As anticipated, the impact of pandemic was quite telling on our business. But our razor-sharp focus on cost optimization and less direct cost due to pandemic helped us to end the quarter with a decent profit. In the midst of the doom and gloom of pandemic, it was encouraging to see BTRC take decisive moves to implement SMP regulations; we now eagerly await tangible outcomes in this regard.”
The harsh impact of pandemic on the business was further exacerbated due to the increase of supplementary duty by 5% introduced in the recently declared national budget, Mahtab added. In fact, the very premise of the budget, which assumes that the telco sector is awash with cash has been further debunked by the financial data disclosed by other operators. Besides, the lack of support from the Government to help the industry cushion the blow from the pandemic made the situation all the more painful, he opined.
Reflecting on Robi’s place in the society during pandemic, he added: “Despite harsh business conditions, we stood by all our partners in every possible way we could. We successfully leveraged our leadership in data analytics to support the Government manage the pandemic. With all our employees working from home throughout this quarter, we managed to keep our customers across the country connected with a slew of innovative digital initiatives. This quarter has certainly given us a sneak-preview of the digital future that awaits us.”
Robi Axiata Limited (“Robi”) is a joint venture of the Asian telecom giant, Axiata Group Berhad based in Malaysia and the global telecom giant headquartered in New Delhi, India, Bharti Airtel- with Axiata holding the majority shareholding in the joint venture. Robi is the second largest mobile network operator in Bangladesh consistently creating new digital experiences for the people of the country. Through sustained investment Robi has created a robust telecom infrastructure to deliver innovation to all corners of the country. In addition to delivering its innovative digital products and services, the country-wide telecom infrastructure serves as the key enabler for the growing digital eco-system of the country. Be it urban or rural, people find their way to Digital Bangladesh through Robi.