August 18, 2007 (LBO) – Sri Lanka Telecom (SLT), the island’s only wireline operator, has reported 45 percent lower profits in the June quarter as it sliced 875 million rupees off revenue pending a court decision on a case filed by a consumer organization. SLT reported 560 million rupees of consolidated profits down from 1,000 million in the quarter ended June 2007 on revenues of 9.7 billion rupees, down three percent, after taking off 785 million rupees pending a final court decision.
“The court directed the parties to have further discussions on the reduction of tariffs from the domestic telephone revenue and rental charges excluding new connection charges,” Sri Lanka Telecom said.
The next hearing of the case is on August 27 when the finalized proposal would have to be submitted to be effective from January 01, 2007. SLT has also been asked to switch to per second billing.
SLT said the first half group profits were still up 10 percent to 2.54 billion rupees from 2.30 billion.
The firm says the impact of the revenue reduction would be short term.
“¦we believe that in the competitive environment the reduced tariff will stimulate demand and this will help to mitigate the impact on revenue,” Chief Executive Shoji Takahashi said