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Banglalink continues to deliver strong results in q2′ 2016

Dhaka, 4 august 2016 – Banglalink, one of the leading digital communications providers in bangladesh serving over 30 million customers, today announces its results for the second quarter of 2016.

Banglalink continued to demonstrate year-on-year growth in q2 2016 in both revenue and ebitda, despite the shift in Ramadan and intense market competition.

In q2 2016, banglalink’s total revenue increased 5% year-on-year to bdt 12.3 billion. The increase in revenue was mainly driven by continued increases in voice revenue, primarily as a result of traffic growth, coupled with a 60% increase in data revenue. this data revenue growth was driven by 6% growth in data users and 178% growth in data usage, supported by expanding 3g coverage and smartphone penetration. Despite aggressive price competition, banglalink’s arpu increased 5% mainly on the back of growing voice and data traffic.

The relative deceleration of the year-on-year revenue growth rate was primarily caused by the imposition of an incremental 2% supplementary duty on recharges from June 2016, on top of the additional 1% surcharge from march 2016.

The main operational focus during the quarter was the ongoing sim verification program. This government-mandated initiative, started in december 2015, requires each mobile phone operator to verify all customers using fingerprints in order to ensure authentic registration, proper accountability, and enhanced security.

Banglalink is one of the leaders in this mobile security initiative and managed to verify 93% of customers, representing almost 100% of its revenue. This verification initiative will also provide a solid and secure customer base to develop new revenue from mobile financial services as part of our digital strategy.

However, this program contributed to a slowdown in acquisition activity across the market in h1 2016, and also resulted in the blocking of unverified sims in June 2016, both of which resulted in a 3% decline in the customer base at the end of q2 2016.

In q2 2016, the company’s underlying ebitda, excluding one-offs which were mainly related to the performance transformation program and sim re-verification costs, grew 19% to bdt 5.8 billion driven by both the revenue growth and performance transformation initiatives, particularly in human resources and commercial costs. As a result, the underlying ebitda margin was 47.5%, which represents a 5.6 percentage-point increase.

Capex increased 3% to bdt 2.6 billion in q2 2016, while the ltm capex to revenue ratio was 23%. Banglalink continues to invest in efficient data networks, with 50% of the population covered by the 3g network at the end of q2 2016, up from 33% at year-end 2015.

Banglalink also introduced a number of groundbreaking offers in smart phones in the second quarter, enabling customers to embrace digital services more easily.
Commenting on the results, Erik Aas, ceo of Banglalink, said: “We are encouraged to see the response from our customers to the digital services we are offering, which has been instrumental in achieving our second quarter 2016 results. As we transform ourselves into a digital organization, we are confident we can offer improved digital services to our customers.”