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Ooredoo net profit fell 17 percent in 2014, and 89 percent during the fourth quarter, principally because of network and new market investment and customer acquisition costs.

Aggressive price competition in Iraq, Myanmar start-up costs, Indonesian currency depreciation and the Iraqi security situation also affected earnings, however.

The company reported a net profit for 2014 of 2.58 billion rial ($708.3 million), on two percent lower revenue of 33.85 billion rial.

Still, excluding the impact of Indonesian Foreign Exchange, Myanmar start-up costs and one-off customer acquisition costs in Algeria, EBITDA would have decreased by five percent,
compared to the reported 12 percent EBITDA reduction.

In other words, earnings were under pressure even if foreign exchange, Myanmar network construction and Algeria customer acquisition costs are excluded.

That profit pressure is not unusual. South and Southeast Asia might be among the world’s fastest-growing mobile markets, but profit and free cash flow pressures will be significant in 2015.

Fitch Ratings expects most South Asia and Southeast Asia telecommunications operators will face a generally challenging environment in 2015, although its sector outlooks will remain broadly stable.

Minimal or negative free cash flow will result from high capital investment in mobile networks (3G and 4G), while profit margins will decline because of competition, Fitch Ratings said.

“Revenue growth will be limited to low-to-mid single digit percentages as fast-growing data services offset declines in traditional voice and SMS revenues,” Fitch Ratings said.

Philippine, Sri-Lankan and Thai telcos might invest 25 percent to 30 percent of their revenue either to expand networks or acquire new spectrum.

Singaporean telco free cash flow also will be low despite reduced capex at 10 percent to 11 percent of revenue, down from the 2014 level of 13 percent of revenue. Also, Singapore firms will continue to distribute 80 percent to 100 percent of their net income in dividends.

India, Indonesia, Sri-Lanka, and Philippines mobile operator 2015 revenue was likely to grow by mid-single-digits due to growing data usage arising from the greater availability of cheaper smartphones and more-affordable data tariffs, Fitch Ratings said.

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