Oct 05, 2007 (LBO) – Fixed line telecom operator Lanka Bell posted a 70.1 percent growth in after tax profits for the year ended in March but predicts new fibre optic and WiMax projects will reduce future returns on investment. Lanka Bell, a Harry Jayawardene controlled company, said its turnover soared 70.2 percent to 6.32 billion rupees with after tax profits reaching 1.04 billion rupees.
“Lanka Bell has been successful in penetrating into the urban and rural markets by continuing to meet the needs of urban rural customers by providing connectivity and usage at a low cost which is competitive¦,” Jayawardene, chairman of the operator’s parent firm, Distilleries, said.
The tie up with FLAG Telecom, part of the Reliance Group of Companies which is India’s largest business house, will help propagate a fibre optics telecommunications network for Sri Lanka, Jayawardene said in his annual report to shareholders.
Due to the lower profitability and longer pay back period of the capital-hungry telecom projects, the company forecasts ROI to drop significantly, he said.
While Lanka Bell has increased the number of subscribers much of this has come from low-end users, which has the effect of reducing per line income