Sri Lanka Telecom aims for promising 2007

SLT said after paying Rs. 986 million in taxes it was able to record a profit of nearly Rs 2 billion (Rs. 1,980 million) against Rs. 1,3 billion in the same 2006 quarter. Revenue of the group rose to nearly Rs. 11 billion from Rs. 9.6 billion while operating costs grew by just 9% to Rs. 4.5 billion.

Sri Lanka Telecom (SLT) has seen its subscriber base in CDMA phones and mobile provided by its subsidiary, Mobitel, gain sharply in the first quarter of this year while it is also pumping a lot of money into TV entertainment via high speed broadband access network called IPTV.

SLT, announcing its results for the first quarter 2007 where group profits rose by 53 percent from the previous quarter, said it has obtained a broadcast license for the IPTV service from the Ministry of Mass Media and Information and expects to invest nearly Rs. 1 billion to this operation in Sri Lanka this year.

In the quarter under review (January-March 2007), the company sold more than 42,000 new CDMA connections raising the total CDMA customer base to 311,400 by the end of March.

Mobitel, on the other hand, had by the end of March reached a customer base of 917,435, inching towards the magical one million-subscriber base.

On its results, SLT said after paying Rs. 986 million in taxes it was able to record a profit of nearly Rs 2 billion (Rs. 1,980 million) against Rs. 1,3 billion in the same 2006 quarter. Revenue of the group rose to nearly Rs. 11 billion from Rs. 9.6 billion while operating costs grew by just 9% to Rs. 4.5 billion.

Its data oriented services revenue comprising of ADSL, Internet, Leased circuits, etc grew by 43% to Rs. 823 million against Rs. 576 million with much of it coming from ADSL.

The total ADSL customer base increased to over 30,000 and during the period under review SLT also introduced a new ADSL tariff package with 1GB download and upload limit at a lower rental charge of Rs. 1000 aimed at the home users who download and upload in fewer volumes. “ The company expects to increase the ADSL customer base to 100,000 during the year,” the statement said.

The company said it has over 81,000 post paid Internet dialup customers and believes it controls over 60% of Sri Lanka’s Internet Market.

Revenues from international services like settlement of international incoming traffic revenue, IDD call charges and Interconnection revenues rose by 13% to Rs. 2.3 billion in the quarter. “Though the settlement rates for international traffic are decreasing, the corresponding revenue has increased due to the increase of incoming international traffic volume. International settlement revenue which is the key component of the international revenue has contributed Rs. 1.7 billion showing an increase of 20%. A marginal decrease of IDD call revenue has been observed due to stiff competition. However, the interconnection revenue has increased,” it said.

The company said Mobitel has over 80% population wise coverage and over 60% geographical coverage, using 610 base stations in 507 locations throughout the island. Mobitel is expected to launch its 3G services by the middle of this year spending over Rs.3 billion.

Mobitel increased its total revenue by 31% to Rs. 1.5 billion in the quarter but operating costs rose by 40% to Rs. 993 million mainly due to recruitment of new employees, payments to the equipments suppliers for annual maintenance and aggressive advertising campaigns.