Mobile Operator Beeline Reports Large Drop in Subscribers

The number of subscribers to the mobile operator Beeline plummeted by more than 400,000 in the fourth quarter of last year—the single-largest drop for the carrier since it entered the Cambodian market in mid-2009—while the average revenue per user (ARPU) increased slightly, the company’s quarterly financials released Wednesday show. 

The report, by VimpelCom Ltd., Beeline’s Amsterdam-based parent company, states that the number of customers sank from 1.02 million to 598,000 between October and December.

VimpelCom spokesman Bobby Leach said the drop is because the company decided to rid itself of “inactive” users.

“Subscriber numbers dropped mainly due to our decision to remove inactive customers from the numbers,” he wrote in an email.

The company had maintained a steady increase in subscribers since it entered the Cambodian market in May 2009, with only about 20,000 leaving in the third quarters of 2010 and 2011.

In the third quarter of last year, Beeline saw the first large reduction in customers at 106,000, dropping subscribers from 1.126 million, its highest ever, to 1.02 million.

Despite the decline in customers, the report shows a slight increase in the average amount of money spent by each Beeline subscriber—from $1.5 in the third quarter to $1.8 in the fourth quarter.

“The increase in ARPU reflects the fact that remaining customers are therefore the higher spending ones, as well as the lower customer numbers being factored into the ARPU calculation,” said Mr. Leach.

But Wednesday’s financials also show that the company’s total operating revenues year-on-year for Southeast Asia—including Cambodia, Laos and Vietnam—dropped from $68.7 million in 2011 to $60.8 million in 2012, and its regional earnings for 2012 remained in the red at -$9.9 million. VimpelCom does not break down the figures by country.

In April, VimpelCom sold its Vietnamese operations a month after it devalued it and its Cambodian assets by $527 million.

VimpelCom has been conducting an ongoing analysis of its assets since early last year, and in October, The Financial Times reported that the company had contracted Standard Chartered bank to sell its Cambodian assets.

The company has not publicly said it is looking to sell Beeline, and when asked Wednesday about a possible sale, Mr. Leach declined to comment.

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