The ATH group of companies reported their earnings for the year ending March 31, 2009. Profits were reported at $52 million, nearly a 20% decline from reported income for the previous year.

The arrival of competition to the mobile sector in October 2008 is responsible for the decline in sales margins. Group sales revenues did show an increase from the previous year by 5.4%, from $269.5 million to $284.2 million.

From the Fiji Times article, other factors contributing to the decline in profits:

Decline in consumer spending was experienced especially in the last quarter of the financial year. This was due to a combination of the flow effects of the global financial crisis and relatively weak trading conditions in the domestic economy due to effects of the flooding in January 2009.

 

Gone are the magical old days of monopolies, ATH companies will now have to work to increase profitability.

Gone are the magical old days of doing business, ATH companies now have to work hard to increase profitability.

The significance of this news? As the era of liberalisation dawns on Fiji, the ATH group finds itself having to contend with the reality of competition. The decline in profits will continue until the group can put itself in position to reap the benefits of competition. ATH has benefitted from it’s monopoly position, all the while subjecting the country to high prices and poor service. Competition will increase demand for telecom services and it is up to these companies to figure out how they will continue to grow their businesses to grab a slice of the growing pie. Their future profitability depends on how well they can contend with this new reality.

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