Jordan Telecom sees profits drop as costs rise

Jordan Telecom Group , the country's sole fixed-line operator, said on Monday 2011 net profits fell 5.6 percent to 89.8 million dinars ($126.6m ) as operating costs rose and investment income fell.

The telecom group, in which France Telecom owns a 51 percent stake, said revenues of its integrated mobile, internet and fixed-line business rose 2.4 percent to 411.8 million dinars in 2011.

Jordan Telecom saw growth in broadband 3G services boosting the 2011 bottom line in a sector which has seen a fierce turf war among three operators and is hit by sluggish economic growth

Jordan Telecom’s chief financial officer Raslan Diraniyah said most of the growth was driven by the fast growing broadband internet services which rose a healthy 20 to 25 percent last year compared to 2011.

"This is the first time in three years we see a growth in revenues after stable growth and this performance was despite competition pressure in the market and the economic slowdown," Diraniyah told Reuters.

The group's total subscriber base, which includes fixed lines, grew by 17.7 percent reaching 3.55 million subscribers at end of December 2011 compared to 3 million at end of 2010, the firm said.

But operating expenses went up 8.7 percent over the year to 248 million dinars at the end of December 2011 due to higher costs of marketing 3G services, while the company earned lower interest on its bank deposits of around 280 million dinars.

The firm's mobile subsidiary Orange has over 34 percent market penetration.

Kuwaiti telecoms operator Zain is the largest mobile operator in Jordan with around 2.7 million subscribers and a market share of around 37 percent in a market with almost 100 percent penetration.