How Robi is responding to power crisis at network sites

Frequent power disruptions, which are now forcing mobile operators to use generators at their network sites for uninterrupted services, increased Robi Axiata's network maintenance cost by 29% in the July-September period and the company is embracing solar power for a smoother future.

"To ease pressure on the national grid, we expedited our solar installation programme this year, which started in 2018," said the country's second largest telecom operator's Chief Corporate and Regulatory Officer Mohammed Shahedul Alam.

Already having installed solar power systems at its one-tenth or 1,600 network stations, the company is going to add around 500 sites under solar by the end of June next year and it is planning for 100% solar coverage by 2030.

"Like all industries, we are in need of the net metering facility for the sake of ensuring the needed return on the solar investments," Alam said.

Right now, solar power is helping firms weather power disruptions and save some in bills. But without the announced facility to earn enough through selling unused solar power to the national grid the investments would not be a success for firms.

Robi Axiata had a better quarter in the July-September period as it returned to profits from the losses incurred in the April-June period.

However, its Tk29.2 crore in net profits after taxes in July-September was 66% lower than that in the same period last year.

Subscriber base shrunk

Robi had little success in adding enough new subscribers over the last quarter when its competitor Grameenphone was unable to sell new connections due to a regulatory ban that came at the end of June.

Its subscriber base shrunk by 0.3% in three months to 5.44 crore and the company said, "Quality subscriber acquisition drive led to this slight dip in the subscriber base."

However, compared to the same quarter last year, subscriber base grew by 2.5%.  

"We added new subscribers, but that did not help us expand the total subscriber base as all the major players faced a decline in respective subscriber bases in the last quarter," said Alam.

However, multi-simmers, who have several connections, seemed to have better focused on their preferred connections and, that is why average revenue from loyal users increased, which helped the total revenue grow too, according to Shahedul Alam.

The quarterly revenue grew to Tk2,207.4 crore in July-September, which was by 4.8% higher from the previous quarter and 5.9% from the same period a year ago.

Despite a spike in its quarterly network maintenance cost of around Tk200 crore on average, the company managed to reduce its costs of revenue, operating costs, administrative costs as a part of its ongoing "drive for efficiency" said Alam, adding that selling and distribution costs went up due to market competition.  

Robi Axiata Chief Financial Officer and Acting Chief Executive Officer M Riyaaz Rasheed blamed large scale capital expenditure, high depreciation and amortization costs for squeezing the company's profit margin.

The acting CEO said, "Unfortunately, there is no alternative to this strategy if we want to increase the scale of our business, which is critical to securing long-term sustainable growth in profit margin. We are determined to get to the end of this long-haul journey; we urge our shareholders to accompany us in this exhilarating journey ahead."

Also, stubborn foreign exchange losses and high taxes and duty burden added to the profitability squeeze in the third quarter, said Shahedul Alam.

Both the officials mentioned Robi's increased data user base and higher data uses as positive events of the last quarter.

Robi shares were unchanged at the floor price of Tk30 in the Dhaka Stock Exchange on Thursday.