This excerpt taken from the MICC 20-F filed Jan 13, 2005.
Our revenue was $647.1 million for the year ended December 31, 2003 as compared to $605.2 million for the year ended December 31, 2002. Included in total revenues for the year ended December 31, 2003 are revenues of $5.9 million from our operation in Colombia which was divested in February 2003 and revenues of $39.1 million from our operation in El Salvador which was reconsolidated from September 15, 2003. Included in total revenues for the year ended December 31, 2002 are revenues of $32.3 million from operations divested in 2002 and $50.5 million from our divested operation in Colombia.
We derive our revenue from the provision of telecom services (such as monthly subscription fees, airtime usage fees, roaming fees, interconnect fees and other telecommunications services), connection fees and equipment sales. In addition, in Vietnam, we derive our revenue through a revenue sharing agreement with a Vietnamese government owned entity that also generates its revenues from the above-described revenue.
The revenue from the provision of telecom services increased from $581.3 million in 2002 to $621.7 million in 2003. This was due to a combination of factors. Firstly, the subscriber base in continuing operations continued to grow. Secondly, the total number of minutes of airtime increased. However, airtime per subscriber decreased as the proportion of prepaid subscribers, whose usage and airtime tends to be lower than that of postpaid subscribers, increased. Thirdly, the average price per minute decreased in 2003. Connection revenues increased from $7.9 million in 2002 to $10.2 million in 2003 due to the increase in the number of new subscribers, though in some cases connection fees were reduced to zero as a spur to subscriber growth. Revenues from equipment sales remained constant at approximately $15 million.
We note that a number of our regulators have, or are expected to, reduce interconnection rates. Because we are often one of the larger suppliers of telephone services in the countries we service, this could have the effect of reducing our revenue. Nonetheless, we believe that lower cost to customers may have the effect of expanding our markets over time.
We believe there is a significant opportunity for rapid growth in our markets due to low cellular penetration in economies with high growth potential and substantial pent-up demand for basic voice telephony services. We believe we can grow our subscriber base and revenue by continuing to focus on
prepaid services while controlling costs and maintaining our position with postpaid customers. We are developing a number of non-traditional distribution channels in our ventures to expand our market share and reduce our operating costs. There is, however, a risk that, as new competitors enter our prepaid markets and price competition intensifies, our prepaid customers may be more likely to move from one cellular operator to another than our postpaid customers. In that event, we believe our strong service coverage and increasing use of non-traditional distribution channels, competitive tariffs and brand awareness will enable us to compete effectively in our prepaid markets.