The country’s second-largest telecom provider has said it expects to turn its first profit in 2015, some six years after launching its local operations, media reports say.
Vodafone Qatar’s market share and revenues have steadily increased since the company ended Ooredoo’s local monopoly in 2009. While it has remained in the red, the provider’s losses have been narrowing and are expected to disappear in the coming quarters, according to one of its top executives.
“We expect to make a profit at some point next year,” Steve Walters, Vodafone Qatar’s chief financial officer, told a news conference yesterday while announcing the company’s latest financial results, according to Reuters.
The prediction comes despite a “competitive pricing environment” that’s forced Vodafone to charge lower-than-expected rates in order to keep pace with state-backed Ooredoo.
In a conference call with analysts, Vodafone CEO Kyle Whitehall said the company has been “squeezed” in all mobile market segments, particularly local and international calling as well as pre-paid services.
In August, both Vodafone and Ooredoo launched promotions that lowered the cost of phone calls to 10Dhs/min.
While the offer may have been good news for customers, it caused Vodafone Qatar to take a financial hit.
“This is undoubtedly been one of the most challenging quarters we’ve had for some considerable time,” Whitehall said.
Still, revenues for the three months ending Sept. 30 were up 20.22 percent year-over-year to QR559 million (US$153.51 million). The summer is typically one of the slowest periods for Vodafone Qatar due to the annual exodus of residents to cooler climates.
Vodafone Qatar’s sales are still dwarfed by its larger rival, Ooredoo Qatar, which has brought in roughly three times as much revenue over the last nine months in its home market than its only local competitor.
According to the latest financials, Vodafone’s quarterly loss has shrunk, improving from QR75 million ($20.6 million) a year ago to QR54 million ($14.83 million) in its most recent three-month reporting period.
Additionally, over the last year, Vodafone Qatar’s mobile customer base has been growing faster than the population, increasing its overall local market share.
The company is also reaping the benefits of its 4G network rollout, Whitehall said. Faster mobile internet speeds generally encourage users to consume more data, which can result in additional charges to customers and more revenue for mobile operators.
The company has also been successful in attracting more postpaid mobile users, who generally bring the company more money and recurring revenues than prepaid users. Postpaid users make up 18.8 percent of Vodafone Qatar customers, up from 17.9 percent a year earlier.
Other developments during the company’s most recent quarter included the acquisition of state-owned Qatar National Broadband Network. Whitehill told analysts yesterday that the move will give Vodafone Qatar, which is currently focused on mobile markets, greater opportunities to expand into broadband internet services.
Following the seasonal slowdown over the summer, Vodafone Qatar executives say they expect the company to resume growing this quarter.
“(It’s) going to be a bit tighter than we had hoped for for the rest of the (fiscal) year,” Whitehall said. “But I still believe the market is strong and that the market is in good shape, and we’ll continue to grow in line with that.”