Despite a 24.3% YoY growth in overall revenues in local currency, Jazz’s revenue decreased 2.6% in USD terms during the fourth quarter of 2022, mainly due to PKR devaluation. In contrast, the margins are hampered by an exponential increase in operational costs, including fuel, electricity, interest rate and forex.
Increase in fuel and electricity prices by 71% and 53% YoY, respectively, was offset by a one-time effect to the reversal of a provision.
Despite macroeconomic challenges, Jazz continued to lead the market with an unabated focus on driving digital inclusion while enhancing quality of services for its customers by investing over PKR 52 billion under its ‘4G for all’ ambition in FY 22, taking its overall investment in Pakistan to US$10.4 billion. During the reporting period, Jazz’s total mobile subscriber base reached 73.7 million, with 41.3 million 4G users and 10 million Voice-over-LTE (VoLTE) users offering a more immersive communication experience.
The performance of its digital services during the quarter solidified Jazz’s position as a preferred lifestyle partner for 123 million mobile broadband users in Pakistan. JazzCash, the most popular mobile wallet in Pakistan, reached 16.4 million monthly active users and 186,000 active merchants, recording 2.1 billion transactions in FY22, with a Gross Transaction Value of PKR 4.2 trillion. On the other hand, self-care app Jazz World continued to enjoy strong customer adoption levels, with monthly active users reaching 12.7 million. At the same time, Pakistan’s largest homegrown OTT platform Tamasha now has 4.3 million monthly active users.
Aamir Ibrahim, CEO of Jazz, said, “Despite an unprecedented increase in operating costs and restrictions on importing essential telecom equipment, we are making an all-out effort to optimize and enrich customer experience through consistent network investments and our robust digital services portfolio. Higher user engagement in digital services and recognition of Jazz as the fastest mobile broadband provider, by Ookla, in Pakistan further validates our commitment to offering the best-in-class services to our customers.”
He further said that while Pakistan’s telecom sector has a dollarized cost structure, in terms of spectrum fees, capex, and fuel, the weakening rupee against the dollar makes telecom equipment more expensive. Moreover, the rising interest rates are making its financing twice as expensive. In this scenario, the average revenue per user must rise from the current lowest in the world, at $0.75, to at least $1.5 in the next 12 months to ensure consistent improvement in the quality of services. Jazz, for its part, has an accelerated growth mindset and will take disciplined inflationary pricing to help mitigate this digital emergency.