Twin Growth

Aug 12, 2008 (LBO) – It’s easy to miss the business strategy behind a glitzy re-launch of Sri Lanka Telecom’s wire-line services, as the island’s only copper wire networked telco kicked off a new campaign, cutting connection charges.

Broadband, or fast internet access, is a high growth area for SLT together with mobile services.

Mobitel, SLT’s fully owned cellular subsidiary, made a 15 percent or 500 million rupee contribution to the company’s first half profits which beat analysts’ expectations.

Mobitel’s sudden success has overshadowed gains at SLT’s broadband unit.

“There is a big contribution from Mobitel in the first half of the year and data revenues have also increased by a significant amount,” says Abeysekera, who took over as acting chief executive after SLT’s second largest shareholder, NTT of Japan, sold its stake to owners of Malaysia’s Maxis telecom.

Data services made up nine percent of total revenues in 2006, but last year they topped 13 percent.

Incumbent phone operators like SLT, which have the advantage of wide networks built with state patronage, are stamping their dominance on broadband services worldwide.

“Margins on the fixed voice services are reducing because of compe