Even Keel

December 5, 2006 (LBO) – Dialog Telekom, the island’s biggest mobile phone operator, retained its AAA (lka) rating, but subscriber growth has lagged against industry peers, Fitch Ratings Lanka said.

œThe rating reflects Dialog’s leading position in Sri Lanka’s cellular-mobile space with around 60 percent subscriber-share, its robust growth and strong operating cash flow, the risk evaluator said Tuesday.

œAt the same time, the rating positively considers the company’s recent and impending investments that will transform it into a fully diversified telecoms services provider, although Fitch notes that investment related risks remain.

Despite the increasing competition in the cellular mobile segment, Dialog has been able to keep its market share broadly stable.

Although the pace of growth is moderating, the agency expects the cellular subscriber base to register robust growth over the next three years.

Dialog’s subscriber base grew by 45 percent (annualised) during the first nine months of 2006. The net post-paid additions have reduced to around 5-percent of total net additions.

Fitch estimates, Dialog’s subscriber growth lagged behind the overall ma