Business News of Friday, 3 August 2012

Source: myjoyonline

Vodafone reverses 26 years of GT’s non-profitability in three years

Vodafone Ghana CEO, Kyle Whitehill has said the company inherited Ghana Telecom at a time when it has been unprofitable for 26 years, but in just three years Vodafone Ghana is now recording impressive operational profits, otherwise known as EBITDA (earnings before interest, taxation, depreciation and amortization).

He said even though Vodafone is yet to record real cash profits after tax “we are excited that at least we have reserved the 26years of non-profitability of GT in just three years,” he said.

Kyle Whitehill was speaking in an exclusive interview with Adom News Editor Nii Narku Dowuona.

Vodafone acquired 70% shares in Ghana Telecom at US$900 in 2008 and laid off more than 2,000 workers and hired fresh skilled staff in their place, with a promise to turn the fortunes of the company round in two years.

In a circular that went round within the company at the time, the new management under David Venn stated that mass retrenchment was necessary because it wanted to do things the ‘Vodafone Way’ and make the company ‘productive and profitable in two years’.

It has been three years since Vodafone actually started operations in Ghana, and Kyle Whitehill said 4,500 GT staff then ran the company into 26 years of non-productivity and unprofitability, but the current 1,400 staff at Vodafone has achieved three times the revenue GT achieved then.

“For the first time in the 26years history of Ghana Telecom/Vodafone we’ve gone positive at the EBITDA level and we are delighted about that,” he said

He said, as a result of the impressive operational profits, Vodafone has become one of the biggest taxpayers in the country, and it recently won an award from the Ghana Revenue Authority for being second most prompt taxpayer.

Kyle Whitehill also noted that Vodafone inherited GT as the third largest telecom operator in Ghana with just about 1.6million mobile subscribers and about 140,000 fixed line subscribers, but within a matter of three it has more than doubled mobile subscriber base to 4.7 million and almost doubled fixed line subscriber base to over 270,000 as at May 2012.

Within the same period, Vodafone has almost moved from third largest operator to second based on subscribers, beating long time second place Tigo to third.

Vodafone is yet to go positive on profit after tax, but sources at the company hinted that it is likely to make profit after tax by the close of this year.