Vodafone Qatar to cut staff as losses widen; chairman quits

18/05/2016 05:41 AST

Vodafone Qatar plans to cut its workforce by a tenth, it said on Tuesday, as it reported a sixth straight widening quarterly loss citing competition and waning international call usage.

The Vodafone Group affiliate has yet to make a quarterly net profit since ending state-controlled Ooredoo’s domestic monopoly in 2009, but appeared close to breaking even in mid-2014.

Since then, however, Ooredoo has fought back, cutting prices to woo back customers and defend its market share.

Vodafone Qatar’s fourth-quarter loss nearly tripled from a year earlier to 180 million riyals ($49.5 million) for the three months to March 31 versus 66 million a year earlier.

Vodafone Qatar’s financial year starts on April 1. The company’s net loss for the 2015-16 financial year was 465.7 million riyals versus 215.8 million the previous year. Mobile average revenue per user (ARPU), a key industry metric, for the 12 months to March 31 fell 13 per cent to 107 riyals.

In Tuesday’s bourse statement the company also announced that Shaikh Khalid Bin Thani Al Thani had quit as chairman due to other work commitments. Rashid Al Naimi has been appointed acting chairman.

“The past year has been difficult for the company with the impact of structural changes in our industry, namely the increasing use of data at the expense of international voice traffic and sustained price competition,” Al Naimi said in the statement.

This has severely impacted Vodafone’s revenue performance, he added, with these difficulties prompting the company to recently decide to cut its workforce by 10 per cent. The company’s statement did not state when these layoffs would begin.

International calls had been especially lucrative for telecom operators in the Gulf, which is home to large expatriate populations. But internet-based messaging and calling applications such as Skype and WhatsApp, which offer free or low-cost communication, have hurt this revenue stream.

Vodafone Qatar, 23 per cent owned by Vodafone and 22 per cent by state-run Qatar Foundation, also said it would not pay a dividend for 2015-16. It had paid a cash dividend of 0.21 riyals per share for the 2014-15 financial year, Reuters data shows.

Vodafone reports underlying earnings growth after European recovery Mobile phone operator Vodafone posted its first underlying growth in both full-year revenue and core earnings since 2008, helped by a return to top-line growth in Europe in the fourth quarter. The world’s second-largest mobile phone operator reported full-year revenue of £40.97 billion (Dh217 billion or $59 billion), up 2.3 per cent on an underlying basis and broadly meeting market forecasts, helped by a better performance in South Africa, Egypt and Turkey.

It posted earnings before interest, tax, depreciation and amortisation of £11.61 billion, slightly shy of forecasts. It said it expected underlying earnings growth to accelerate to 3-6 per cent this year.

Gulfnews