After several years of picking up customers and garnering market share at the expense of its state-backed rival, Vodafone-Qatar is losing ground to its much larger competitor, Qatar’s Communications Regulatory Authority (CRA) has said.

Vodafone broke the local monopoly of Ooredoo – then known as Qtel – in 2009. For the next two years, the incumbent’s mobile subscriber numbers declined as Vodafone rolled out its services.

In terms of customer market share, the situation has largely stabilized. Approximately two out of every three mobile users in Qatar were Ooredoo clients last year, the same as in 2014, according to the CRA’s annual report, released yesterday.

In financial terms, however, Vodafone is slipping.

The firm now brings in QR30 of every QR100 spent on mobile services by Qatar residents, according to the CRA. That’s down from a peak of QR34 and is a shift that has benefited its competitor, the regulator added.

“Ooredoo’s mobile market share (revenues) remains strong and has seen an improvement in 2015,” the report stated.

‘Ooredoo…clearly surpasses Vodafone’

Driven by Qatar’s rapidly growing population, overall spending on mobile services continues to climb.

The industry’s revenues reached QR10.06 billion in 2015, up 6 percent from QR9.46 billion a year earlier, according to CRA figures.

However, that’s largely failed to translate into similar gains for the industry’s bottom line.

“Market profitability has seen less significant growth,” it said. “Ooredoo’s earnings … and profits clearly surpass Vodafone’s.”

Within Qatar, Ooredoo posted a net profit of QR2.14 billion last year, up 11 percent over 2014. In contrast, Vodafone Qatar lost QR466 million during its 2015 fiscal year.

Both firms have attempted to cut costs by reducing labor expenditures through layoffs. Vodafone said it was trimming its headcount by approximately 50 people earlier this year, while Ooredoo said it was cutting 100 positions at the group level.

Both companies have also shaken up their executive ranks.

Vodafone has failed to turn a profit since it started to operate in Qatar.

Its financial woes may be one reason why CRA’s annual report does not discuss the prospect of inviting a third telecom firm to operate in Qatar.

Despite making more than a dozen references to its mandate to promote competition – as well as citing numerous initiatives undertaken in 2015 – there is no mention of a survey, released last September, that showed Qatar residents would welcome a third carrier into the market to help drive prices down.

Thoughts?