Pakistani operator Jazz saw its fourth-quarter revenues grow 1.9 percent from the year before to PKR 50.5 billion, including PKR 46.9 billion in mobile service revenue, an increase of 1.5 percent. Of that number, mobile data contributed PKR 15.1 million, a jump of more 26.6 percent. EBITDA grew by 7.1 percent to PKR 24.9 billion, with a margin of 49.4 percent, up from 23.2 percent reported the year-earlier. Capex excluding licenses rose to PKR 10.9 billion.
Data revenue was boosted by an increase in data customers and 4G customer conversion, doubling of data usage through higher bundle penetration and continued data network expansion. Financial services revenue grew as well during the quarter by 24.6 percent year-on-year, as Jazz Cash increased its 30-day active wallet subscriber base to 7.3 million.
The number of mobile customers increased by 7.6 percent year-on-year to 60.5 million from 56.2 million. Of the total, the number of people using data services climbed 17.6 percent to 38.8 million from 33 million. ARPU fell 1.9 percent to PKR 260 from 265. At the end of 2019, the population coverage of Jazz’s data network was more than 60 percent.
Jazz’s parent company Veon said revenues were impacted by Supreme Court’s June 2018 decision ordering an interim suspension of the deduction of taxes and service/maintenance charges on prepaid and postpaid connections on each recharge/top-up/load levied by mobile phone service providers. On 24 April 2019, the Supreme Court disposed of the proceedings and restored the impugned tax deductions, deciding that it would not interfere in the matter of the collection of public revenue. On 3 July 2019, the Supreme Court issued its Judgement dated 10th May 2019 and, in addition to confirming its ruling on tax deductions, further clarified that mobile phone service providers cannot charge customers for service and maintenance charges, which were 10 percent of customer recharges. As a result of the Judgement by the Supreme Court, the Pakistan Telecommunication Authority (PTA) issued two letters to Jazz, dated 30 August 2019 and 19 September 2019, requesting Jazz to refund the service and maintenance charges collected by Jazz between April 2019 and July 2019.
Following the PTA’s directions, on 29 September 2019, Jazz proceeded with crediting these administration fees to the balances of the affected customers. On 6 December 2019, the PTA issued a show cause notice alleging that the credits were made with conditions attached to them and, therefore, PTA required Jazz to credit the affected customers again within 15 days. Jazz disputes the PTA’s allegation and on 3 January 2020 provided the PTA with a complete factual explanation of the credits that were made and requested the withdrawal of the show cause notice. Jazz is currently awaiting the PTA’s response.