Pakistani mobile operator’ Jazz saw its total revenue decreased by 2.6 percent year-on-year to PKR 49.3 billion impacted by tax changes in Pakistan. Excluding these changes, growth would have been 12.8 percent YoY. Mobile service revenues dropped 3 percent to PKR 45.7 billion.
Due to tax changes in Pakistan jazz is facing a loss in revenue. In Q1, data revenue strongly increased by 17.1 percent YoY. The data revenue growth was driven by an increase in 4G customer base which more than doubled, continuing the trend of data usage through higher bundle penetration and network expansion.
Financial services revenue grew strongly during the quarter by 18.9 percent YoY as Jazz Cash increased its 30-day active wallet subscriber base to 7.8 million an increase of 42 percent YoY in mobile wallets. Jazz continued to perform well despite the ongoing competitive nature of the Pakistan market, particularly in data and social network offers, and remained focused on expanding its digital services to drive further growth.
As a result of the COVID lockdown, all of the Jazz owned experience centers and 37 percent of third-party stores were closed, negatively impacting both recharge and SIM sales.
In order to mitigate a drop in subscriber engagement as a result of a slowdown in the overall economic environment, Jazz implemented several initiatives including mobile recharge through digital channels, multiple loan options (in case of low balance), doorstep delivery, and credit limit enhancement for post-paid customers.
These initiatives were focused on SIM revival and reactivations, new offers to cater to high data requirements for work from home, etc.
While the current environment will likely adversely impact overall its wallet servie’s growth, it already saw a significant increase of top-ups and bundle purchases through JazzCash. Its self-care app, Jazz World, has crossed the 5 million monthly active users level making it the largest telco App in Pakistan, a 10-fold increase over the prior-year period. Its M-Health and Jazz TV services are also seeing encouraging momentum.
The customer base increase was supported by greater subscriber engagement and a higher number of data customers on the back of the continued expansion of the data network, which led to a higher 4G subscriber penetration of 28.5 percent. The YoY customer trend reflects its commercial strategy to focus on higher quality of sales in order to further improve the customer mix of our subscriber base, leveraging on network quality of service.
Excluding these impacts, the EBITDA would have increased by 7.7 percent YoY. The EBITDA margin stood at 46.4 percent, decreasing by 4.2 percent YoY. The increased investment in JazzCash was also a drag on margins.