For big mobile phone companies like Dialog and Airtel, the new competing territory is the rural countryside and the bottom of the pyramid, industry analysts say.
"Both Airtel and Dialog are now targeting the rural areas. This is where the turf is now and it is evident from some of their marketing strategies," an analyst noted. Some provinces in the country have a below 10 % fixed line distribution such as North West (9 %t), Sabaragamuwa (8 %), Uva and North Central (6 %), East (4 %) and North (1 %), according to industry statistics.
The analyst also noted that Dialog’s slash in rates with its subsidiaries losing money has seen its margins shrink at a group level which saw the Dialog Group recording a loss of Rs 3.6 billion in 2008 against Rs 8.8 billion in 2007.
Another analyst pointed out that major losers in the group are the subsidiaries and not so much the core business. "The core mobile company has also lost, but the margins of the group are affected mainly by the subsidiaries losing," he added. The Dialog Group comprising of Dialog Telekom PLC, Dialog Broadband Networks (DBN) and Dialog Television (DTV), recorded consolidated revenue of Rs. 36.17 billion for 2008 achieving a revenue growth of 6 %. |
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