War deters Dialog’s growth

The drop in international roaming revenue has affected premier blue chip Dialog Telekom’s decline in growth over the past few quarters, along with the plunge in revenue contributions from the North and the East, according to top company officials.

“We are growing big and the effect of the growth denominator at present is large. Also during the last few quarters the exceptional situation in the North and the East and revenue from those areas not coming in, together with the international roaming revenue declining due to the drop in tourist arrivals have resulted in the growth decline,” Dr. Hans Wijayasuriya, CEO Dialog Telekom told The Sunday Times FT.

The country's tourist arrivals plummeted during the past year, with the escalation of the war situation in the country.

Dr. Wijayasuriya said the company tied with IFC, a member of the World Bank Group, on Monday to finance their expansion projects.

“We have mapped out our capital expansion strategy over the next couple of years and as a start we raised RS.150 million recently. The tie up with IFC is the second step,” Yusof Annuar Yaacob - Chief Executive Officer of TM International Sdn Bhd, Dialog Telekom PLC’s majority shareholder, explained.

The US$100 million package includes a US$ 70 million term loan facility and a US$ 30 million equity commitment via the acquisition of a 1.6 percent holding in Dialog from Telekom Malaysia (TM). Dr. Wijayasuriya said that an exact split of fund usage cannot be said, but 65 percent of the commitment during the next two years will be for mobile infrastructure and tower network expansion. The US$ 30 million equity commitment will also facilitate a potential improvement of liquidity for Dialog shares in the market.

Dr. Wijayasuriya said presently Dialog’s debt to equity quotient is at 20 percent and it will increase as the company draws down the IFC funds. He also said that Dialog plans to cover 100 percent of the population with their tower network during the next 12 months.

Yusuf said that Dialog had bid for Suntel, to acquire the company in order to jump start their fixed line business, but their bid was not the highest. “We were in the bidding process, but our bid was not the highest and we are out of the running,” he said.