Citycell continues to face loss

Citycell, the country's oldest mobile phone operator, continued to lose money in the full year ending March 31, as it battled stiff competition and paid the price of its involvement in the illegal call termination scandal, according to its largest shareholder Singapore Telecommunications.
Singapore Telecommunications (SingTel), which owns 45 percent of Citycell, said its share of the mobile operator's after tax loss was $38 million Singaporean dollars (S$) or around Tk178.crore (one Singaporean dollar is equivalent to Bangladeshi taka 46.8).
Had the losses been evenly spread among all the shareholders, Citycell's after tax loss would have been around 84million Singaporean dollars or Tk385crore during the period.
SingTel, the major shareholder of Citycell, Bangladesh's only CDMA standard mobile phone operator, has been incurring losses since 2006. The company's profit after loss in Citycell was S$5million and S$28million in 2006 and 2007 respectively.
According to SingTel's full year financial result, the company's loss in Citycell increased mainly because of the S$14million penalty it had to pay to the telecom regulator for its involvement in illegal call termination through VoIP technology. The Bangladesh Telecommunication and Regulatory Commission (BTRC) fined Citycell Tk150crore for its involvement in illegal VoIP in January 2008.
SingTel's fourth quarter loss from Citycell increased by 9 per cent year-on-year mainly due to the lower operating revenue resulting from price competition, though the subscriber acquisition cost per subscriber declined following lower handset prices,” it said.
Sania Mahmood, general manager, (Marketing, Communications and Branding) of Citycell, yesterday said, "The FY 2007-08 loss posted by Citycell is a result of its investments in the past two years, specifically on network expansion, extensive rollout of nationwide customer care points and subscriber acquisition costs".
"This is an investment to ensure in the Citycell's future business and we are already yielding encouraging results. Our aggressive tariff, improved infrastructure and customer care network have gained consumer confidence in line with our current business plan", said Sania.
The country's once sole mobile operator has lost its single leading position after introducing GSM mobile telephony. When its rivals one after another grabbed the market shares, Citycell lost out.
SingTel financial result reveals that CityCell market shares as of March 2008 was 4 percent, which was 4.1 percent a year ago. Citycell's close rival, UAE- based Warid, a new comer in the market, last week claimed that it grabbed 7percent market shares with having 3million customers up to May 10, 2008.
In terms of subscriber numbers, the Citycell is the Bangladesh's fifth largest mobile operator. Its subscriber reached 1.55million as of March 2008 with a 32 percent growth. By the end of March 2007, the number of the company's subscribers was 1.17million.
According to the latest figures released by the BTRC up to March 2008, the number of total mobile phone subscribers reached 38.93 million.
Grameenphone is the market leader in mobile telecommunication sector with around 17.8 million subscribers, while Orascom Telecom Bangladesh, which operates Banglalink, is the second leader with around 8.3 million subscribers.
Telecom Malaysia International Bangladesh, which operates AKTEL, and Warid Telecom International are the third and fourth market players with around 7.4 million and around 2.7 million subscribers respectively.
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