SLT post tax profits sharply up

Sri Lanka Telecom (SLT) has reported an after tax group profit of Rs.3.8 billion during the first nine months of 2006, a 55 percent increase when compared to the same period of the previous year, according to a Bartleet Mallory Stockbrokers (Pvt) Ltd report.
The net profit of the group for the third quarter of 2006 was Rs.1.57 billion, which is a 42 percent increase compared to the same period of 2005. The group revenue for the period was Rs.29.88 billion, up 27 percent from the previous year.

The report said that despite competition from the mobile telephony market, the fixed telephony service has grown by 6.8 percent last year to 919,040 subscribers. To further consolidate the fixed access telephony segment, SLT launched CDMA in November 2005 and has been successful in giving out 200,062 CDMA connections by the end of the first 11 months. With the CDMA 2000 1X success, SLT has accelerated the next phase in introducing CDMA high speed (CDMA 200001X EV-DO),” the report said, adding that this will enable high speed data services such as broad band internet access, FTP, VPN and multi media services thus facilitating reliable, high performance and cost effective data solutions to high end customers.

The report said that the company’s subsidiary, Mobitel has made a profit of Rs.23 million during the third quarter, thereby reducing the cumulative loss of the nine months to Rs.167 million. However, the effect of this profit to the group has been mitigated by Rs.19.5 million writing off of goodwill that arisen on acquisition of Mobitel.

“The company is pursuing a strategy based on competitive pricing, quality of service and access speed and currently has a market share of more than 63 percent as an Internet services provider (ISP), SLT provides a simple dial up service in post paid/pre paid form. SLT also offers Internet leased lines at 64 kbps, 512 kbps and 2 Mbps, mail server service, web and domain name servers and several Data services such as resource sharing, inventory management,” the report explained, adding that presently the company has approximately 65 percent data service market share. “The CDMA technology, broadband service and the mobile market is growing rapidly especially in rural Sri Lanka. With SLT commencing the second stage in CDMA high speed, Mobitel moving into the second phase and the core network gradually moving into the IP based next generation network, where voice, data and media will be facilitated on a single network; we foresee rapid growth in SLT’s performance in the short to medium term,” the report said.