Turnaround Strategy

Sept 10, 2009 (LBO) - A write-off of old equipment will help Sri Lanka's Dialog Telekom, a unit of Malaysia's Axiata, lower costs, support higher call volumes in a turnaround strategy after positing a record quarterly loss, an official said. A six billion rupee network equipment write-off drove up losses to a record 7.6 billion rupees in the June quarter at Dialog, which runs the island's largest mobile and pay TV networks and also has broadband and fixed access units.

"Our programme of cost management is in no way complete. We are encouraged by the results in the first two quarters (this year)," chief executive Hans Wijayasuriya told ETV’s Lanka Business Report in an interview.

"Over the next few quarters we will continue to be very aggressive and rescale operations and deliver the operating margins that an operator of our size should contribute."

Revenue Crunch

Small signs of a turnaround are already apparent following aggressive tariff cuts which almost halved Dialog’s average call minute revenue.

Two consecutive quarters of falling mobile revenues were reversed with a three percent June quarter top line growth over the March quarter mainly from higher post paid call volumes and international termina