Thursday, 24 February 2011

Hello’s profits fall 58 percent

An employee of Hello waits on a customer at the company's service centre in Chamkarmon district in December last year. Photo by: Will Baxter

via CAAI

Thursday, 24 February 2011 15:00 Jeremy Mullins

MOBILE operator Hello saw its profit after tax fall by 58 percent in the fourth quarter, compared with the previous three months, according to a presentation from parent firm Axiata Group released yesterday.

Subscribers climbed 16 percent while revenues declined 3 percent in the fourth quarter, compared with the quarter before, the results showed.

While Axiata did not detail specific dollar amounts for Cambodia, the group echoed comments by many in claiming the service provider market is overcrowded. Hello continues “to face competitive challenges in an over-crowded market”, Axiata stated yesterday.

In November, the most recent month for which statistics gathered by the government are available, Hello claimed 870,000 subscribers, placing it as the third largest provider before the merger between Smart and Star-Cell.

Meanwhile, the firm also unveiled a new pricing scheme yesterday, termed “Hello Laor”, offering unlimited on-net calls for either a daily or a monthly fee.

Chief Executive Officer Simon Perkins was quoted as saying in the release that the pricing plans would lower costs for customers. Perkins could not be reached for further comment yesterday.

Axiata Group as a whole also fell into the red for the latest quarter after booking a 1.1-billion-ringgit (US$356-million) impairment stemming from its investment in India’s India Cellular Ltd yesterday, reflecting the intense competition from new operators, it said in a statement.

The impairment contributed to a 367-million-ringgit group loss at Axiata for the three months ending December 31, compared with a 558.3-million-ringgit profit a year earlier, the Kuala Lumpur-based company said.

Axiata had also previously announced an impairment on the goodwill of Hello Axiata of 49 million ringgit. Axiata fell 1.2 percent to 4.98 ringgit at 4:17pm in Kuala Lumpur trading yesterday. ADDITIONAL REPORTING BLOOMBERG

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