CRAN 2022 Revenue Drops by 51.6%

Staff Writer

The Communications Regulatory Authority of Namibia (Cran) recorded a total revenue of N$36.3 million which was N$38.7 million (51.6 percent) shy of the N$ 75 million target.

According to Cran’s 2022 annual report, this variance is a result of the timing delays associated with the date when the revised regulatory levy regulations came into effect and the additional amount of time, after the licensee’s financial year end date, that Licensees are allowed to file their audited financial statements with the Authority.

Cran used audited financial statements of licensees to determine the revenue base on which to calculate regulatory levies. Revenues from telecommunications and broadcasting were severely affected as a result.

According to the annual report, a total administrative and other operating expenditure of N$140.4 million was incurred for the period, which represents a N$48.9 million (53.4 percent) deficit over the budget of N$91.5 million.

However, the Authority generated positive cash flows from operating activities amounting to N$17.4 million. This is mainly due to the positive movement of credit loss allowance due to the settlements agreed with the licensees who initially challenged the original levy regulations in the High Court.

Moreover, Cran stated they recorded a total comprehensive income of N$119.6 million for the period under review, representing an increase of 1,334.7 percent from the prior year’s loss of N$9.7 million.

The total profit improved in the current year when compared to the prior year. This is due to the entity recording a loss in the prior year and a profit in the current year.

The entity recorded a profit primarily due to the positive movement in the loss allowance.

“Revenue for the year under review increased by 9.16 percent from N$33.3 million in 2021 to N$36.3 million in 2022. This significant improvement in the current year, when compared to the prior year, is due to the regulatory levies charged with the implementation of the new Regulatory Levy Regulations and the formula-based spectrum,” the report highlighted.

Revenue comprises regulatory levies from telecommunications and broadcasting service licensees, spectrum fees, revenues from numbering plans, and type approval fees.

The report mentioned that the regulatory levies are calculated as a percentage of operators’ turnover based on a progressive licence fee formula that caps the maximum percentage at 1.5 percent.

“Spectrum fees, which comprised 87.4 percent of the revenue generated, are derived from radio licences. The type approval fees, which made up 0.85 percent of revenue, are derived from charges for the use of telecommunications equipment in Namibia,”Cran said.

Numbering fees, which make up 5.4 percent, are derived from the utilisation of the numbering plan by telecommunications licensees.

Regard operating expenses, Cran reported that the operating expenses increased by 198 percent from N$47 million in 2021 to N$140 million in 2022. This significant improvement is due to a positive movement in the expected credit loss allowance on the trade debtors.

The Authority’s assets increased by N$119.3 million to N$250.3 million as at March 2022, from N$131 million in 2021.

The increase was due to non-current assets increased due to the settlement agreement with Telecom Namibia that will be revised in the 2023 financial year.

Another reason being due to the current assets that improved significantly during the prior year due to cash and cash equivalents that increased from the cash inflow from the settlement agreement with Telecom Namibia.

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