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MOBITEL |
In the face of growing macroeconomic pressures and intense competition within the industry Mobitel has performed exceptionally well during the year under review. Revenue posted a growth of 72%, an increase from Rs. 7.0 billion in 2007 to Rs. 12.06 billion in 2008. This increase in revenue can be attributed to the rapid growth in prepaid subscriber base coupled with swift take up of postpaid subscribers during the latter part of 2008 with the introduction of Upahara Postpaid package. Mobitel Postpaid Subscriber base grew more than threefold within a short time span of four months while the overall Mobitel subscriber base grew by 92% to reach 2.69 million subscribers. Rapid growth in subscribers is attributable to the planned approach taken by Mobitel in introducing products and features more appealing to distinct market segments. Despite rapid erosion in prices in the market the Company was able to manage Average Revenue Per User (ARPU) through innovative pricing plans which saw extensive adoption. Rapid growth in distribution channels, product suite etc. complemented the above course.
Operating Profit Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew by 71% to Rs. 4.27 billion in 2008 compared to Rs. 2.49 billion in 2007, while Earnings before Interest and Tax (EBIT) increased by 74.6% to
Rs. 1.86 billion, compared to Rs. 1.06 billion in 2007.
During the year Mobitel recorded a net profit of Rs. 1.17 billion, compared to the net profit of Rs. 0.25 billion made in 2007. Revenue has been the key driver of profitability which the Company achieved during the year under review. The sharp increase in profitability was attained despite escalation of costs in many fronts stemming from macro environment as well as factors that are specific to the mobile industry. Rising inflation, increase in energy prices highlighted the key macro effects while increase in frequency charges and the costs associated with the mandatory registration of all mobile subscribers being challenges the mobile industry had to face. Despite these costs affecting the supply side, Mobitel was able to achieve optimum asset utilisation and productivity leading to healthy profits.
Growth in revenues during the year contributed to the strong growth in Company cash flows. The cash flow from operations grew by 45% to Rs. 6.04 billion compared to Rs. 4.19 billion over previous year.
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