ITU Highlights Sri Lanka's World's Fastest Telecom Affordability Gains

27th June 2011, www.lankabusinessonline.com

Sri Lanka is among the top three countries in the world to see a sharp increase in telecom services affordability, a study by the International Telecommunications Union, a UN affiliated body has shown.

ITU's 2010 ICT Price Basket, measures the change in costs of mobile, fixed and fixed broadband services relative to per person gross national product, from 2008.

South Asian countries of Bhutan, Sri Lanka and Bangladesh were among countries to see the sharpest rise in affordability. Relative costs fell 67.4 percent in 2010 from two years ago in Sri Lanka, behind 75.4 percent for Bhutan and ahead of Bangladesh's 65.2 percent.

Azerbaijan saw the steepest price fall measured by the basket at 81.7 percent.

Consumers worldwide were paying on average 18 percent less for ICT services than two years ago, with broadband prices falling 50 percent. Mobile costs have fallen 22 percent and fixed telephony 7 percent.

As a region, the largest price drops were in Africa, but the countries had high prices to begin with, ITU said. In Africa fixed broadband prices had fallen 55 percent and cellular prices 25 percent.

But in Africa fixed broadband was still three times the monthly average per person GNP and was "prohibitively high", the ITU said.

In developing countries fixed broadband service costs had dropped 52 percent, compared to 35 percent in developed countries.

Small economies with high per person gross national income, such as Monaco, Macao, Liechtenstein, Hong Kong (China) and Singapore topped the ICT Price Basket.

In many developed nations ICT costs were one percent of per person national product, compared to 17 percent from developing countries.

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Sri Lanka Telco Mobitel Invests $60mn on LTE, the Latest Standard in Mobile Network Technology

01st May 2011, www.thebottomline.lk

Sri Lanka Telecom Mobitel, the National Mobile Telecom Service Provider, announced on Friday that it has signed a BOI agreement to trial and deploy a LTE (Long Term Evolution) Network for the first time in Sri Lanka.

This will be part of the company’s network expansion project and will enable Mobitel to import/purchase (locally) project-related items free of customs duty.

Mobitel has committed an investment of approximately US$ 60m in its latest network expansion, adding 1000 LTE capable radio base stations to the existing network infrastructure.

With this, the company’s investments committed to date in its LTE/3.5G/2.5G networks and service offerings amount to over US$ 400m.

“Technology change is a key determinant of a country’s economic growth and therefore, the introduction of LTE Network is expected to drive growth in the telecommunication sector as well as improve competitiveness and growth in several other economic sectors heavily depended on infocom” said, Jayampathi Bandaranayake, Chairman BOI of Sri Lanka. “We are happy to support Sri Lanka Telecom Mobitel in its endeavour to provide the latest ICT technologies which is sure to catalyze national development”.

LTE is the latest standard in the mobile network technology evolution after GSM/EDGE and 3.5G/HSPA network technologies, and Mobitel is gearing towards demonstrating broadband speeds nearing 100Mbps in downlink and 50Mbps in uplink, using this LTE technology when the spectrum is available.

Anusha Palpita, the Director General of Telecommunications said “TRCSL is committed to assist all the telecommunication operators in Sri Lanka to develop world-class telecommunication network facilities in the country. The spectrum allocation for the commercial operation of LTE will soon be finalised where the operators will be able to launch nationwide enhanced ICT infrastructure to benefit all businesses and consumers in Sri Lanka through this latest evolution in mobile broadband technology.”

Nimal Welgama, Chairman Sri Lanka Telecom Mobitel said, “Harnessing the power of ICT to its fullest potential will be the key in realising hyper exponential pace of growth which is needed to build our nation and to do so rapidly. This requires next generation ICT available and affordable to the citizens of our country which will help eventually realise the President’s vision of elevating the e-literacy rate in Sri Lanka. In this regard, this investment on the latest LTE infrastructure will be a significant step towards driving unparalleled growth to propel our country forward.”

ZTE corporation of China was selected by Mobitel as its technology partner to deploy this state-of-the-art LTE ready Next-Generation-Network.

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SLT Tops Rs50bn Turnover. First Sri Lankan Group to Reach the Milestone. Rs 5.96bn PBT and Rs3.94bn Profit After Tax

26th March 2011, www.island.lk

Sri Lanka Telecom (SLT) has become the first Sri Lankan group in the country to achieve the milestone of Rs.50 billion turnover having crossed this landmark in 2010, the company’s Chairman Mr. Nimal Welgama has said in the company’s annual report.

"Given the strategic focus we have instituted in all our areas of business and the emphasis we have constantly infused in ensuring that our end objectives and trades are met or exceeded, it is indeed noteworthy that we have posted a profit of Rs.3.9 billion and turned the company around to be a sustainable, profit making going concern," he said.

The year ended December 31, 2010 saw SLT posting group revenue of Rs.50.25 billion, up from Rs.48.1 billion a year earlier while company revenue at Rs.33.3 billion was down marginally from Rs.34.1 billion posted a year earlier.

Group profit after-tax at Rs.3.94 billion was up from the previous year’s Rs.778 million while at company level, SLT posted a profit of Rs.2.48 billion, up from Rs.1.23 billion the previous year.

Welgama said that SLT was now "Future Ready", having rolled out its national backbone based on Multi-Protocol Label Switching technology in readiness for next generation network services and standards.

With Mobitel, its wholly owned subsidiary, covering the mobile segment, the group had over 85% market share in fixed and mobile broadband areas.

"In addition to being prudently diversified, we are ready to take on the complex challenges of an economy that has long harbored the vision of becoming an ICT hub," he said.

"While physical infrastructure is being established, connectivity remains the key to holistic development."

Despite SLT being one of the biggest market capitalized companies in the country, the free float of its share remains below 3% - with 54 million shares owned by about 15,000 investors.

The Sri Lanka Government and connected parties and Global Telecommunication Holdings NV of the Netherlands, a partner of Malaysia’s Maxis group, hold more than 97% of the issued share capital of the company.

The Secretary to the Treasury with 49.5% of SLT is the biggest shareholder followed by Global Telecommunication Holdings (44.98%), EPF (1.05%) and the Life Fund of the SLIC (0.98%). Other major government shareholders of SLT included NSB (0.73%), Ceybank Unit Trust (0.49%), ETF (0.18%) and the General Fund of the SLIC (0.18%).

SLT has a stated capital of Rs.18.05 billion, total group assets of Rs.87 billion and group liabilities of Rs.37.18 billion.

The SLT Board has recommended a first and final dividend of Rs.0.60 per share which will absorb Rs.1.08 billion. The payment is subject to approval by shareholders at an AGM to be held on March 28.

The directors of the company are: Messrs. Nimal Welgama (Chairman), Sandip Das, Chan Chee Beng, Jeffrey Jay Blatt, Jayantha Dharmadasa, Shaamendr Rajapaksa, Kalinga Indatissa, Lawrence Paratz and Dayananda Widanagamachchi.

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Sri Lanka IT/BPO Sector Targets Niche Markets in Finance & Accounting, Telco, Travel and Aviation

24th March 2011, www.lankabusinessonline.com

Sri Lanka's information technology and business process outsourcing sector is positioning itself as a niche player targeting finance and accounting, telco, travel and aviation sectors, an official said.

"We will focus on SMEs (small and medium enterprises), more that 90 percent of us are working with SMEs in other countries," Dinesh Saparamadu, head of Sri Lanka Association of Software and Service Companies (SLASSCOM).

"We want to be known for quality and ethics, which will be the differentiator."

SLASSCOM has 120 members who account for 90 percent of the exports.

Saparamadu said IT was now the country's fifth largest export and the industry wanted to push revenues to a billion dollars by 2015.

SLASSCOM was working with universities and higher education institutes to expand capacity and was also increasing awareness is schools with students and parents about opportunities available in the sector.

Saparamadu said the association has engaged a public relations firm in the UK to build international awareness about the country.

Recently a sector report on financial and accounting services outsourcing had been released which potential investors who want to set up shop can use.

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Telcos Invest $300mn in Sri Lanka as TRC Aims to Up Last Year's Rs120bn Revenue

23rd January 2011, www.sundaytimes.lk

The Telecommunications Regulatory Commission (TRC) says this year will see more than US $ 300 million worth of investment from the telco industry. “This is a large investment and we plan to increase the total revenue from the industry by at least Rs. 10 billion more than last year,” Anusha Pelpita, Director General TRC told the Business Times.

He said last year’s (approximate) revenue figure is Rs 120 billion. He added that the Interconnection regime, (which is the fee charged by the call receiving party from a call originating party; E.g.; from Dialog to Mobitel) and also the minimum floor rate for calls has helped the industry by eliminating unfair practices.

Mr. Pelpita added that while there’s been no unhealthy competition in terms of ‘voice’ or telephone calls from the industry players as was seen in 2009 and early 2010, the battle has now spilled onto data – or Internet connection speed (broadband speed).

“After we pointed out that none of the operators had more than 25% of the promised speed (by them to the customers) they have made it a point to improve the broadband connections,” he said.

He said that now the broadband speed is at 60% to 70%. He added that TRC will put out a standard stipulating a minimum broadband standard per day, which will see further progress in the Internet connection speed.

Mr. Pelpita said the regulator will over the next three years enhance the penetration levels of the broadband/Internet in the island. “Now it’s at 2% and we need to increase it to at least 10% by 2014,” he added.

In this respect, he said that more large investments in this area are needed. “Many Chinese and Indian parties want to come into broadband, but we want to grow the existing players first,” he added.

Mr. Pelpita said that the Commissioners sanctioned amendments to the TRC Act early this month. “The last amendment was 14 years ago – in 1996. The new Act (after the amendments) will give more teeth to the regulator,” he said. He said that a 10-member committee in this regard will be appointed and they hope to see some light at the end of the tunnel within six months.

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Tata Communications Bid for Sri Lanka's Suntel, a Telco Running Fixed Access Wireless Network

04th October 2010, www.lankabusinessonline.com

India's Tata Communications had put in a bid for Sri Lanka's Suntel, a unit of Sweden's Telia which runs a fixed access wireless network in the island, a media report said.

India's Economic Times said, Tata Communications Ltd (TCL) formerly a state-run firm in which the government still owns 26 percent has been given the go ahead to bid for the Sri Lankan telco.

TCL had submitted the bid last month, the newspaper said, citing an unnamed Indian government official.

The report said in 2008, TCL had bid 80 million US dollars for the firm, but this time it is expected to have bid less.

India's Mahanagar Telecom Nigam Limited (MTNL) had submitted a higher bid at the time, but later pulled out.

The report said TCL was still negotiating the purchase, but is not clear whether the bid is still active.

Suntel's chief executive Jeremy Huxtable told LBO that he had no comment to make at this time.

Sri Lanka's Etisalat Spends $163mn on Expansion and 3G Upgrade

20th July 2010 www.dailymirror.lk

Sri Lanka's Etisalat unit said it was spending 163 million US dollars to expand its network into war ravaged north of the country and improve its broadband services in urban areas.

The expansion will see 480 new base stations taking the total to 1580, which the firm says will be the largest in the island.

"We are investing 163 million US dollars (18.5 billion rupees) to expand base stations and bring HSPA 28.8 megabits per second.

"We are bringing coverage investment, distributed all over the country with special emphasis on the North and the East," chief executive Duminda Ratnayaka said.

Ratnayaka said expansion of its broadband services will see HSPA (high speed packet access) technology with 28.8 megabits per second speeds.

Over 500 third generation (3G) base stations will be built on existing locations.

Alcatel-Lucent has been chosen as the vendor.

UAE-based Etisalat bought the Sri Lanka unit from Millicom Cellular International when it exited Asia.

The firm says the expansion will be funded by debt at 'attractive terms' as the firm was virtually debt free and its parent is rated A+ by Fitch Ratings.
"We are virtually a debt free company,' deputy chief executive Riyaz Rasheed said.

"Given our status as a debt free we have managed to finalize the funding."

The firm said its subscriber base was now close to 3.0 million.

Ratnayaka said a recent floor price set by the regulator was beneficial to "both the consumer and operator."

"The operator has to have a healthy business to ensure that good services are delivered to the consumer," Ratnayaka said.

Sri Lanka's Bharti Airtel unit has petitioned courts over the move. Sri Lanka's 15 million subscriber market is shared between Dialog Axiata, Sri Lanka Telecom Mobitel, Airtel, Hutch and Etisalat.