By Paul Tate
AMMAN — Jordan Telecom Group’s subscriber base grew by 34 per cent during the first nine months of 2006, largely driven by a huge surge in MobileCom customers, while the group’s overall profit dropped slightly in the face of stiff competition in international calls.
According to a statement released on Wednesday, the group’s subscriber base jumped to 1.9 million at the end of September, from 1.4 million at the end of 2005.
The growth is being driven by a vast expansion in the customer base of GSM operator MobileCom, which has increased by 63 per cent on 2005 figures, and also by an upsurge in subscribers to Wanadoo’s ADSL broadband service, the group’s Internet service provider.
“The GSM market is booming at the moment due to a number of factors, including the large influx of Iraqis, Jordanian expats and visiting Gulf Arabs, together with a significant reduction in the price of pre-paid calling cards which are now valid for one year,” said Salim Abu Manneh, the group’s cooperate financial controller.
Figures show that MobileCom’s third quarter revenues reached JD101.6 million, an increase of 18.8 per cent on the previous year, while Wanadoo generated revenues of JD7.4 million, a growth of 42.3 per cent in the same period of 2005.
“Our GSM market share has grown to 28 per cent with 1.2 million subscribers while our ADSL subscriber base has reached 50 per cent of Internet customers, becoming the main driver of Wanadoo revenues as people become more attracted to the benefits of high speed broadband,” said Manneh.
Fastlink, owned by the Kuwait-based Mobile Telecommunications Company, continues to retain the lion’s share of the country’s lucrative GSM market with 2.3 million subscribers, while the country’s third GSM operator Umniah has around half a million customers.
However, despite the growth in Jordan Telecom Group’s subscriber base, overall third quarter revenues saw little change on the previous year as a result of fierce competition in international traffic and a seven per cent increase in operational costs.
Revenues totalled JD268.8 million, compared to JD268.0 million during the corresponding period of 2005, while the profit margin witnessed a slight drop to JD68.4 million, from JD69.5 million the previous year.
Most of the losses occurred in Jordan Telecom’s fixed-line service which has faced heavy competition in international traffic since its monopoly ended in January 2005.
Revenues totalled JD181.4 million during the first nine months of this year, representing a decline of 6.8 per cent on 2005 figures.
“This was expected as we face stiffer rivalry in international calls from an array of competitors offering cheap pre-paid call cards and Internet dialling services. All of this is affecting our overall revenues,” said Abu Manneh.
“Although we have reduced international call charges and increased our MobileCom and Wanadoo subscriber base, this has not offset the losses resulting from this new competition,” he added.
Jordan Telecom was privatised in February 2000 in partnership with France Telecom as part of the government’s commitment to the IMF structural reform package.
The government retains a 15.6 per cent stake while France Telecom holds a 50 per cent majority interest, with the option of an additional one per cent, which it is expected to acquire by the end of this month, according to a well-informed source.
Other stakeholders include the Social Security Corporation with 17.6 per cent and the Kuwaiti Al Nour Company which has a 10 per cent stake.
Friday-Saturday, November 3-4, 2006
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