Gamtel/Gamcel turns in a profit on 2010 accounts but challenges ahead for Gamcel

Mergers, Acquisitions and Financial Results

Gambia’s National Assembly has approved the annual reports and financial statements of state-run PSTN operator Gambia Telecommunications Company (Gamtel) and its cellular network operating subsidiary Gambia Telecommunications Cellular Company (Gamcel) for the year ended 31 December 2010.

Delivering the activity report, Baboucarr J. Sanyang, the managing director of Gamtel said his institution was established as a public enterprise in 1984 by an Act of Parliament with the mandate to provide efficient and affordable telecommunications and related service to the nation at large.

According to him, the challenge for Gamtel during this period was exacerbated by its aging network infrastructure and near obsolete equipment. He said as a result, Gamtel embarked on some capital intensive projects with the aim of upgrading, expanding and introducing new telecoms services in response to the growing challenges posed by the competition with the increasing demand of customers for more efficient service delivery.

He added that during the year under review, the cross river Gambia project jointly funded by Gamtel and Sonatel of Senegal was commissioned whilst this project provided a fibre link from Dakar through the sea at Barra via Banjul to Southern Casamance to provide wider internet capacity bandwidth for the carrying of increased traffic.

MD Sanyang noted that Gamtel reported total revenue of D1.4 billion as at 31st December 2010  compared to D1.3 billion in 2009 and this represents an increase of D0.1 billion representing 8% increase with a gross profit margin of 37% while the increase in revenue is attributed to increase in international and interconnection revenues by D90 and D22 million respectively.

 “The total cost of sales for the year amounted to D877 million and of this amount D432 million relates to payments of interconnection charges to GSM operators for calls terminated on to their network while D377 million relates to payments to foreign carriers for carrying and termination of international traffic into the country,” he concluded.  

The National Assembly members and subject matter specialists also raised concerns, suggestions, questions and recommendations before adopting the Gamtel activity report and financial statement for the year ended 31st December 2010.

Similarly, the Joint Session of the Public Accounts and Public Enterprises Select Committees also on Wednesday unanimously adopted and considered Gambia Telecommunications Cellular Company Limited (Gamcel) activity report and financial statement for the year ended 31st December 2010.

Baboucarr J Sanyang, managing director for Gamtel said that Gamcel was established as a subsidiary of Gamtel in the year 2001 to build and operate cellular services. However, a study was conducted prior to the launch, which indicated a projection of a customer base of 15,000 to commence operations with.

He disclosed that some of the challenges the company continues to face include network expansion, deployment of the value-added services, capacity building and financial constraints. He said that to overcome these challenges, management continues to ensure the sustainability, viability, and profitability of the company through investing in expansion projects, other value-added services and aggressive market activities.

Sanyang revealed that the free bonus cost was D192.768 million in 2010; no amount was reported in 2009 and this cost represent 39% of the cost sales while the company incurred material cost of D86.946 million in 2010 compared to D94.733 million in 2009. He added that this reduction is mainly attributed to the drop in dealers commission because of the introduction of electronic voucher (NOPAL) sales.