Robi counts losses, blames unhealthy competition

Despite encouraging growth in terms of both subscribers’ base and revenue, mobile operator Robi was unable to register any profit in 2017.

It made a net loss of Tk 2.8 billion in the year, the company announced in a new release issued on Thursday.

A number of market and regulatory factors, alongside continued investment for network development, forced Robi to incur this heavy loss.

The intensification of market competition around pricing for both data and voice, made the financial results particularly bleak for the company in 2017, according to the release.

The company said the existing unfair pricing structure created room for predatory pricing and cross-subsidy. Such anti-competitive market practices are helping to deepen the existing crisis with regards to the prevailing unhealthy market competition, it added.

Robi also blamed “exorbitantly high taxation regime” for putting further strain on the financial results of the smaller players.

As the country gets ready for 4G era, the dire financial reading of Robi indicates the diminishing power of the mobile operators to finance the ensuing digital revolution in the country, said the release.

During the year, the company delivered a strong 26.8 per cent growth in subscriber base over 2016 to reach 42.9 million, adding 9.1 million new subscribers which represents 29.6 per cent subscriber market share.

Innovative product offerings, effective dual brand strategy and superior data network experience enabled Robi to deliver a strong growth in subscriber base, it said.

Robi achieved a strong revenue growth of 29.7 per cent YoY to reach Tk 68.3 billion in 2017 driven by the successful merger with Airtel. YoY data revenue also witnessed a strong growth of 89.1 per cent. Data revenue growth was propelled by nationwide smooth network integration after merger coupled with innovative data offerings to drive data usage.

In 2017, operating profit stands at 19.0 per cent impacted primarily by higher network operating costs and intense price competition. Robi incurred Tk 2.8 billion net loss after tax in 2017 due to continuous capital investment in nationwide network modernisation, significant OPEX, high regulatory cost and sector specific taxation.

Robi added 1.7 million new subscribers in quarter 4 of 2017 to reach 42.9 million.

Robi managing director and CEO, Mahtab Uddin Ahmed said, "Robi is on its way to becoming the number one network of Bangladesh. We are confident that we can provide significantly better customer experience in terms of data speed and stronger network to our subscribers.

With Airtel on board as the 'youth brand' and Robi as the 'digital brand', “we have successfully increased our subscriber base by 26.8% in 2017."