Financial Times

CDMA revenue sees SLT profits soar in 1Q 2006

SLT recorded a turnover of Rs.8.6 billion because of local revenue rising by Rs.1.4 billion mainly due to revenues of Rs.1.2 billion from new CDMA connections. CDMA business came into operations during the last quarter of 2005.

Pre-tax profits at the Sri Lanka Telecom (SLT) Group jumped in the first quarter of calendar 2006 to Rs.2.1billion, up 70% from the 2005 comparable quarter partly due to rising CDMA revenues, the company said.

Post-tax profits rose to Rs.1.3 billion, the company said in a statement attributing the rise to an increase in group turnover to Rs.9.65 billion.

The statement said that SLT’s fully owned subsidiary Mobitel has been able to increase its turnover by 56% in the first quarter of 2006.

The revenue items other than the revenue from sale of hand sets have increased. The increase of operating expenditure was 60% and it was mainly derived from sales and distribution expenses and currency devaluation.

Depreciation of the subsidiary has increased by 43% due to additions to GSM assets base and aggressive depreciation of AMPS (Advanced Mobile Phone Service) and TDMA (Time Division Multiple Access) technologies.

The interest cost of the subsidiary has increased by 95% due to increase of borrowings for the GSM roll out. “Due to high depreciation and interest cost the subsidiary has made a net loss of Rs.202 million,” it said.

The fixed line telecom giant has been able to reach the milestone of one million fixed lines recently together with over 125,000 CDMA lines. The group expects to increase its customer bases both in Mobile and CDMA fixed lines aggressively during this year and to expand the global connectivity.

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