Orange Jordan's profit hit by rising costs

Jordanian incumbent adds 530,000 customers in 2011, but profit disappoints
Jordan Telecom Group's profits declined in 2011 owing to rising costs.
Jordan Telecom Group's profits declined in 2011 owing to rising costs.


Orange Jordan, the country’s incumbent telecom operator, said that its net profit for 2011 fell 5.6% to JD89.8 million ($126.6 million) compared to the full year 2010, while its revenues rose by 2.4% to reach JD411.8 million.

The decline in profits came as the telco, which offers fixed-line and mobile services, experienced an 8.7% increase in operating expenses which pushed its gross operating margin down by 5.9% to JD163 million. Orange Jordan said that the increase in operating expenses was linked to higher interconnection costs, mainly from higher national and international interconnection prices and volumes. The telco also faced higher "selling and commercial costs" related to its 3G+ offers.

The telco said that it was also hit by “a decline in finance income” due to lower interest rates on bank deposits.

Orange Jordan’s subscriber base grew by 17.7% to reach 3.55 million at the end of December 2011. The operator attributed this growth to various mobile and internet offers it launched through the year, and also to high demand for 3G and fixed-line internet services.

Orange Jordan, which is 51% owned by France Telecom Group, competes with Zain Jordan and Umniah.

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