Displaying items by tag: profit

GAFA tax lands in second EU country after France

Written on Thursday, 03 January 2019 10:08

Austrian Chancellor Sebastian Kurz vowed to press ahead with a tax on large internet and technology companies, following France's example, as the European Union struggles to finalize a new EU-wide levy.

France, which is pushing for a new so-called “GAFA tax” is advancing with its own tax to ensure the global giants pay a fair share of taxes on massive business operations in Europe.

“It is only fair that internet giants in Europe pay a proper amount of tax,” Kurz said, according to a statement. ‘In addition to an EU-wide move, we'll also act on a national level. We will introduce a digital tax in Austria.”

Kurz said that EU member states “agree in principle that there is a need for such a tax.” He said Finance Minister Hartwig Loeger was in the process “of working out the details and their implementation and will unveil the basic framework at the beginning of January.” The tax would then come into force as part of the government's planned tax reforms in 2020.

“The aim is clear - to tax companies that generate huge profits online, but pay hardly any tax on them, such as Facebook or Amazon,” Kurz said.

In addition to taxing direct sales, France will also require the companies to pay a levy on advertising revenues, websites and the resale of private data, French Finance Minister Bruno Le Maire announced earlier.

Under EU law, US technology titans such as Google and Facebook can choose to report their income in any member state, prompting them to pick low-tax nations like Ireland, the Netherlands or Luxembourg. Such firms, on average, pay a nine-percent levy, compared to 23% for other businesses, according to Margrethe Vestager, the EU competition commissioner.

The low tax rates have caused anger among voters in many European countries, but the 28-member bloc is divided on how to tackle the issue.

Published in Government

Three of China’s state-run mobile operators have posted positive financial results for the first-half of 2017, after enduring a difficult 2016. China Telecom, China Unicom and China Mobile all made solid gains on their bottom line, largely due to the continued rapid demand for data and 4G uptake.

All three entities suffered a decline in earnings during 2016 - but in the first-half of this year they’ve made a combined profit of CYN 77.6 billion ($11.6 billion) compared with a combined profit of CYN127.6 billion for all of 2016.

Analysts have attributed the success of the state-owned mobile operators to significant 4G subscriber gains from January-June. The trio took its LTE user base to 885 million. In addition to this, it was further disclosed that both China Telecom and China Mobile are increasingly close to reaching the 70% 4G penetration mark, with China Unicom lagging behind by a reported 14%.

China Mobile remains the market incumbent with a 64% share of total subscribers, 67% of which are 4G users. The Chinese operators ended June with 3.47 million 4G base stations, the breakdown of which consisted of China Mobile (1.65M) China Telecom (1.05M) and China Unicom (770,000). It was also disclosed that China Mobile has announced its intentions to construct an additional 120,000 4G sites in the second-half of next year, whilst China Telecom has said it will deploy another 110,000 by the end of this year.

Mobile voice revenue continues to decline sharply due to the dominance of OTT’s, but all three operators still managed to grow mobile service revenue by 5%. It’s the universal demand for data which has contributed to the operator’s success so far this year. China Telecom has enjoyed a healthy increase of 24% in mobile data, accumulating CYN55.3 billion in the process. China Mobile reported a 34% increase in mobile data accumulating CYN185 billion, whilst China Unicom’s data growth increased by 21%, accumulating CYN43.5 billion.

The state-run operators have signed up 23.7 million 4G subscribers in July, which takes the country’s total to 908M. However, China Mobile has announced its plans to end 2017 by amassing 630M 4G subs, which analysts suggest is a target they should easily surpass. At this extraordinary pace, China will likely end the year with well over 1 billion 4G customers, which would also subsequently mean that China would have 40% of the 2.45 billion global LTE connections by the end of the year.

Published in Telecom Operators

Chinese telecommunications colossus ZTE has attributed its first-half net profit success to its investment in 4G infrastructure and handsets. The world’s fourth-largest vendor of smartphones has hit its projected first-half net profit target forecast of 30%.

Analysts said that domestic telephone network providers continued to invest in 4G infrastructure provided by ZTE, and the firm also enjoyed a significant growth in the sales of its mobile devices. ZTE’s profit was $344M, whilst revenue rose by 13% which incidentally was also ZTE’s projected target.

In a statement released to the press, ZTE acknowledged that the organization has been presented with many new opportunities and expressed its vision to deploy 5G products and services. 5G standardization is expected to be established in 2018.

The statement read, “Looking to the second half of 2017, the company faces new opportunities," ZTE said in a statement in Chinese. "4G users and traffic will enter a peak period and pre-5G products will have more application, while 5G's standardization, technology and testing will experience a breakthrough."

ZTE reported more growth in relation to its telecom equipment sector, disclosing that revenue in that business grew by 13%. Its telecoms sector focus primarily on constructing infrastructure such as communications towers and accounts for 60% of overall revenue. ZTE’s remarkable financial results were cemented with the fact that its consumer business had also increased by a whopping 24%.

In March of this year, ZTE was left reeling after it was found guilty by the US Commerce Department for breaching US trade rules. It was fined almost $900M for breaking exports regulations. It’s the only smartphone vendor with a real presence in the US, and it has recovered well since that setback earlier this year, remaining the fourth-biggest vendor in the US after Apple, Samsung and LG.

ZTE executives have insisted they will continue to aggressively invest in wireless and 5G technology, whilst also revealing it aims to invest more in international marketing in the second-half of 2017. Revenue from ZTE’s smallest business area which is government and enterprise services has declined by 18%.

In addition to this, ZTE confirmed that it has agreed to sell 10.1% of its smartphone subsidiary Nubia for 727 million Yuan. That will reduce its equity in the company to 49.9%.

Published in Telecom Vendors

French telecom operator Bouygues announced it has bounced back after a loss of 59 million euros in 2015. The telco said it had gained one million new mobile phone customers in 2016, which has allowed the company to return to profit, with its one million new customers pushing its client base to 13 million at the end of December 2016.

“The positive commercial and financial results of Bouygues Telecom in 2016 confirm its strategic choices,” said chairman Martin Bouygues in a statement.

The company’s overall profits were affected by the 84 million euros that it had to pay to share its network with fellow French operator SFR which outweighed the 104 million capital gain Bouygues made from the sale of telecom masts to Spain’s Cellnex.

Bouygues, France’s third largest operator, said some two thirds of its customers have adopted 4G technology with a monthly data use of 4.2 gigaoctects (Go) per month on average, against 2.4 a year earlier. Bouygues joins France’s leading operator, Orange, which also reported a net profit growing nearly 11 percent to 2.93 billion euros in 2016.

Orange’s profits were boosted by a one-off gain of 4.5 billion euros from the sale of just over four percent in British operator EE. It was the first year that Orange, since 2008, has managed a rise in both its sales and Ebitda, said Orange Finance Director, Ramon Fernandez.

Overall, the French market declined by 0.9 percent as income from roaming charges dropped. The rest of Europe saw sales up 5.8 percent, mostly due to operations in Spain where turnover rose by 17.9 percent.

Orange had 201.7 million mobile phone customers worldwide at the end of 2016, up 0.9 percent from the previous year mostly thanks to gains in France and the rest of Europe. Meanwhile, Bouygues group, Bouygues Telecom's parent, reported net profit of 732 million euros for 2016, up from 403 million in 2015 and well ahead of analyst expectations.

Published in Telecom Operators

Etisalat Group posted its Q2 consolidated financial statements on July 27 for the three months ending June 30, 2016. The company posted an impressive 51% increase in net profit compared to the same period last year, amounting to AED 2.3 billion, resulting in higher margin of 6 points to 17%.

Etisalat’s earnings per share (EPS) amounted to AED 0.27 in the second quarter of 2016, representing a 51% increase from the same period last year. The Board of Directors has approved an interim dividend distribution for the six months period ended June 30, 2016 at the rate of 40 fils per share.

In terms of profits, Etisalat’s consolidated revenue for Q2 2016 amounted to AED 13.3 billion with growth of 2% in comparison to the same period last year and 4% quarter over quarter. In the UAE, revenue in the second quarter increased year on year by 3% to AED 7.7 billion and 6% quarter over quarter.

Maroc Telecom, the main telecommunication company in Morocco, which Etisalat is a parent company of, reached a subscriber base of 53 million customers, representing a year over year growth of 4%. Meanwhile in Pakistan, subscriber base increased by 7% year over year to 23.6 million customers.

Etisalat’s consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) totalled AED 6.8 billion, resulting in EBITDA margin of 51%. In the UAE, EBITDA in the second quarter of 2016 was AED 4.3 billion increasing year over year by 3% leading to an EBITDA margin of 56%.

Maroc Telecom’s consolidated EBITDA for the second quarter of 2016 amounted to AED 1.6 billion, resulting in EBITDA margin of 51%. In Pakistan EBITDA in the second quarter of 2016 amounted to AED 0.4 billion with EBITDA margin increasing by 2 points to 36%. Quarter over quarter EBITDA increased by 7% with EBITDA margin improving by 2 points.

“Etisalat’s performance in the first half of 2016 maintains our record of solid performance and consolidates our position as a leading operator in emerging markets,” said Eng. Saleh Al Abdooli, Chief Executive Officer of Etisalat Group. “Therefore, enabling us to continue to offer significant value for our shareholders, whilst being able to make the investment in innovative solutions that is vital to maintain our leading role in one of the world’s fastest evolving industries.”

He continued, “While the industry is renowned for the speed of change, Etisalat Group is also under-going positive change. The re-structuring of the company, which was announced earlier this year, was finalised during the second quarter of 2016. It was designed to help the delivery of our strategic objectives and enhance overall performance.”

He continued, “Etisalat is already using its telecommunication infrastructure and digital technologies to deliver for our customers. We were the first company in the region to roll out 4G-LTE, with now around 95% of the UAE’s populated areas covered by faster speeds. Recently, we launched the UAE’s first Voice over LTE (VoLTE) service, providing customers with vastly improved quality for voice. In addition, Etisalat Group achieved a penetration rate of Fibre-to-the-Home (FTTH) of 89.4%, which is considered as one of the highest in the world.”

Published in Finance

American multinational conglomerate Alphabet Inc., created in 2015 as the parent company of Google, recently released its Q1 financial results which have been hotly anticipated. It appears the company was able to generate high amounts of revenue despite losing a large amount of money due to riskier ventures under the Alphabet umbrella.

According to the results, Alphabet earned $20.3 billion in revenue which is a 17 percent increase Year-on-Year (YoY). In addition, the company earned a net income of $4.2 billion which is a 20 percent increase from earnings in Q1 2015. These are positive results for one of the biggest and most profitable companies in the world.

It was risky ventures that held Alphabet back from higher profits at the end of the day. ‘Other bets’ such as Verily, Google Fiber, Google X, Ventures, Nest, Calico and others led to an overall loss of $802 million during Q1 2016 for Alphabet Inc. Most of the company’s profits came from Google’s advertising business, earning $18 billion in revenue which is a 16 percent increase from Q1 results from 2015.

$2.1 billion of Alphabet Inc.’s Q1 revenue is attributed to Google Play and hardware sales, which was a 24 percent increase from Q1 2015. Some reports suggest that the successful launch of the Nexus 5X and the Nexus 6P helped to increase these figures, since these latest smartphone models from Google were received by the public much better than the Nexus 6 model released in 2015.

Because there wasn’t anything particularly interesting or groundbreaking about Alphabet’s Q1 financial results (which is arguably a good thing for the company), Alphabet CEO, Sundar Pichai, announced the launch of 360-degree live video on YouTube to give consumers and journalists something to get excited about.

YouTube’s 360-degree live video streaming is a feature which has the potential to boost YouTube’s popularity amongst users. No additional hardware is required to watch videos in 360-degree, and after the popularity of 360-degree videos on Facebook, YouTube’s adoption of the next-generation video format is expected to peak interest. Spatial hearing allows the user to listen to audio with difference in quality and experience of the audio output varying with depth and distance.

In addition to 360-degree live video streaming, Alphabet’s CEO has also highlighted the success that game developers are having with Google Play, with more games reaching the 1 million installations mark in 2015 than ever before. The future looks bright for Alphabet Inc., with steady revenue recordings for Q1 2016, and exciting developments on the way.

Published in Finance