SLT allowed duty-free imports

With BOI section 17 approval, SLT will be able to compete more effectively in the supplying of CDMA telephone connections adding strength to its current position at the top, according to industry analysts.
S. C. Securities in a report said the Section 17 sanction would permit the company to become price competitive in the market. It also said the potential for CDMA has been highly under-penetrated in Sri Lanka. “However the highly under-penetrated segment is extremely price sensitive.

Sri Lanka Telecom (SLT) this week received approval from the Board of Investment (BOI) under Section 17, enabling the company to import and purchase (locally) project related items free of customs duty.

Currently an SLT CDMA telephone costs Rs.18,000 whereas its competitors sell them at Rs.12,000, which gives both Suntel and Lanka Bell price competitiveness due to the absence of duty free concessions.

With BOI section 17 approval, SLT will be able to compete more effectively in the supplying of CDMA telephone connections adding strength to its current position at the top, according to industry analysts.

S. C. Securities in a report said the Section 17 sanction would permit the company to become price competitive in the market.
It also said the potential for CDMA has been highly under-penetrated in Sri Lanka. “However the highly under-penetrated segment is extremely price sensitive.

Therefore becoming the ‘cost leader’ would be an ideal strategy for the CDMA service providers,” the report said, adding that despite a higher market price of its CDMA phone SLT has managed to capture over 300,000 CDMA customers in Sri Lanka with the effective use of its most valued brand.

Dialog will also join the race by the end of this month, where it hopes to secure 50,000 CDMAs by the end of the year.
SLT plans to invest approximately Rs 20 billion (US$200 million) within a period of two years to develop the telecommunication and data oriented services in Sri Lanka.

Meanwhile, SLT’s mobile phone wing Mobitel has entered into a deal with BOI to invest in its digital platform under its stage 111 GSM and 3G expansion project. This additional investment will drive its present capacity to extend services to total subscribers of 1,750,000 by increasing its base stations to 1,500. The Telecommunication Regulatory Commission’s (TRC’s) figures show Lanka Bell having 300,000 CDMA telephones, where as SLT currently has 400,000. Suntel has below 300,000 CDMA telephones.