LBR-LBO CEO Forum

Aug 13, 2010 (LBO) – Dialog Axiata, Sri Lanka’s top celco which is turning around after heavy losses last year, had anticipated sales to come down due to economic slowdown, but did not see a price war coming, a senior official said.

“It was the fact that an economic downturn and a price war both were coming at the same time, and we did not get that equation right at the beginning,” Hans Wijayasuriya, chief executive at Dialog Axiata said.

“What we did not predict correctly at that time was (a price war), on top of this economic downturn, on top of consumers having less and less money to spend on a service that can be compromised on.”

The Sri Lankan celco market is shared between Dialog Axiata, Etisalat, Mobitel, Airtel Lanka and Hutch.

An intense price war started with Mobitel, a firm connected to state-run Sri Lanka Telecom giving a cut price tariff plan to state workers, ahead of Bharti Airtel’s entry to the island.

Soon afterwards the celco sector played a tit-for-tat policy that soon turned into a bloodbath that ended with all operators posting record losses in a sector that once gave the best returns.

Wijayasuriya, a Cambridge University educated communications engineer, spoke at a ‘fireside cha