Sri Lanka Telecom’s 2Q profits up to LKR1 billion

1 Aug 2006

Sri Lanka Telecom (SLT)’s quarterly profits rose 112% year-on-year to LKR1 billion (USD9.6 million) in the three months to the end of June 2006, on revenues that rose 31% to LKR9.97 billion. The strong earnings lifted SLT’s six months figures, with net income of LKR2.3 billion, up 67% on the first half of 2005, on turnover which jumped 29% to LKR19.56 billion. During 2Q06 SLT initiated a voluntary retirement scheme which cost the company LKR425 million, but earnings are being lifted by its wireless in the local loop (WiLL) CDMA services introduced last November; the operator expects its CDMA subscriber base to cross 200,000 by the end of the year. A joint venture with India’s Bharat Sanchar Nigam Ltd (BSNL) to route international traffic between the two countries via the ‘Bharat Lanka’ undersea cable is also expected to boost SLT’s bottom line after the cable’s planned commercial launch later this month. Mobitel, SLT’s wholly owned mobile unit, made a LKR13 million loss for the second quarter, taking its 1H losses to LKR229 million. Mobitel, which trails Telekom Malaysia’s subsidiary Dialog Telekom and Celltel Lanka, has reported consecutive quarterly losses since 2003, largely attributed to costs incurred from launching GSM services that year to replace its TDMA network.

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