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VimpelCom's Djezzy down on revenue per user

VimpelCom's Djezzy down on revenue per user.

VimpelCom's Algerian unit, Djezzy, has reported a decline in Average Revenue Per User (ARPU) and subscriber numbers, prompting an 8% decline in interim service revenue to US$519 million during the first half of the current year, it said on Thursday.

Despite the drop in revenue, Djezzy saw its first half 2016 mobile data revenues jump by 85% to US$32 million.

Minutes spent on the network by its subscribers weakened 14% to 333 minutes while data usage per subscriber firmed 11% to 304MB for the half year period, worsened by marked declines in the second quarter.

"In Algeria, service revenue organically decreased 15% in Q2 2016, due to the combined impact of the historic 3G coverage shortfalls ... sub-optimal changes in billing increments, low sales due to change in commission structure and the shift in Ramadan by almost two weeks," VimpelCom stated.

Subscriber numbers also declined from 17.1 million to 16.3 million, with the decline in revenues also attributed to this "customer churn". There was also a period of low telecommunications services usage after the Algerian Ramadan calendar was extended to 24 days this year, compared to 12 days in 2015.

VimpelCom expects the other pressures on its revenue generating capacity "to continue for the remainder of the year," highlighting that "it will take time to stabilise" the business unit and its customer base in the North African country.

To offset this, Djezzy will focus on stabilising the subscriber numbers, distribution transformation, rollout of new offers.

It will also prioritise "data monetisation activities and smartphone promotions coupled with bundle offers" in the coming months.

During the second quarter period, Djezzy continued with its data roll-out and now has 3G data coverage in 41 provinces. The company expects to have extended 3G coverage to the remaining provinces by year-end.

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