Falling profits not damaging to Jordan Telecom, says report

Jordan Telecom’s reduced profit margins are not damaging to the PTT, according to a new report released today by Arab Advisors Group. Jordan Telecom’s profit fell from $83.9 million in 2000 to $64.6 million last year, while revenues grew from $401.5 million in 2000 to $435.5 million in 2002.

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By  Richard Brown Published  October 21, 2002

Jordan Telecom’s reduced profit margins are not damaging to the PTT, according to a new report released today by Arab Advisors Group.

Jordan Telecom’s profit fell from $83.9 million in 2000 to $64.6 million last year, while revenues grew from $401.5 million in 2000 to $435.5 million in 2002. The research firm considers these are the signs of the transformations at Jordan Telecom and the CAPEX investments it has made.

The report’s author, Arab Advisors Group President, Jawad Abbassi, comments: “The number of local and national minutes on the fixed network has decreased between 2000 and 2001 by 2.38% and 6.48% respectively. Given the massive growth in number of mobile phones in Jordan during the same period, and the increasing intra-mobile traffic in Jordan, the decline is a very clear evidence of substantial mobile – fixed traffic substitution in Jordan.”

Between 2000 and 2001, fixed to mobile traffic increased by 50.52% and mobile to fixed traffic increased by more than 86%, and will grow to become one of the very important revenue streams for Jordan Telecom.

While the local fixed traffic volume decreased on JTC’s network, revenues rose 8.45%, generating $56 million, an uplift that stems from Jordan Telecom’s tariff rebalancing, claims Abbassi.

The report also highlights the impact of VoIP international traffic termination in Jordan. As Abassi explains: “Given the growth in the subscriber bases of fixed phone and mobile phones, the lack of growth in incoming international traffic can only be attributed to VoIP traffic termination. Jordan Telecom is now much less dependent on international incoming traffic.” Whereas incoming international revenues comprised 32% of its total traffic revenues in 1999, these constituted less than 20% in 2001.

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