Robi’s net profits decline in Q2, CEO decries market ‘distortions’

Mehedi Hassan Niaz

Published : August 3, 2021 , 11:40 am

Robi Axiata’s net profit declined 20% year-on-year to Tk 466.38 million in the second quarter of the year. The stock fell 2% after Bangladesh’s second-largest telecom company disclosed quarterly data on the Dhaka Stock Exchange.

Robi’s consolidated earnings per share, or EPS, was Tk 0.09 between April and June 2021, compared to Tk 0.12 a year earlier.

The company’s consolidated net profits for the first half of the year, from January to June, amounted to about Tk 810 million. Its consolidated EPS for the first half of the year was Tk 0.15, down from Tk 0.16 in the first half of last year.

Robi has 51.8 million active subscribers, accounting for 29.4 percent of the market, it said in a statement. Of them, 37.5 million are internet subscribers.

The company reported that its subscriber base grew by 8.1 percent in the second quarter from a year earlier.

Robi made capital expenditure investments of Tk 5.84 billion in the April-June quarter to expand its 4G network.

“We are very happy to see that our digital vision has already begun to contribute significantly to our financial performance,” said Mahtab Uddin Ahmed, Robi’s managing director and CEO.

“We are efficiently managing our cost while continuing with experiments with innovative digital technologies to future-proof the company.”

But the regulatory landscape continues to concern Ahmed. Citing the lack of effective implementation of the SMP regulation, he observed that the overall competitive distortions are pushing the market to the “brink of failure, and the fragile state of the competitive landscape is making it difficult to achieve the condition of economic efficiency”.

Ahmed noted that distorted price mechanisms and distribution systems are undermining consumers’ interest and weakening the telecom industry. He stressed that for a market to operate efficiently, no single entity should be allowed to dictate the price and output decisions.

“However, in our market, the presence of significant monopoly power is discouraging the competition from investing in innovative digital technologies that are crucial to the future of the country.”