SLT posts Rs 4.3 b profit in first 3Q

Sri Lanka Telecom (SLT) reported a group after tax net profit of Rs. 4.3 billion during the first three quarters of 2007. This is a 12 per cent increase year-on-year basis.

The group revenue has increased by seven per cent during the nine months of 2007, when compared to the same period of the previous year. The corresponding increase in the company was five per cent.

Additional Revenue generated by the CDMA new connections given, have been absorbed by the revenue reversal made in accordance with the Supreme Court judgment given on the legal actions initiated by “Consumers Association of Sri Lanka”.

Hence the increase of domestic revenue was marginal. The Company expects a growth in usage in the future due to the effect of price elasticity. By the end September 2007, SLT had a fixed line subscriber base of 1.3 million.

During the first nine months of the year, 161,550 CDMA new connections have been given. This is lower than the connections given during the same period of previous year by 3,492 connections. In May 2007, the connection charge was reduced to Rs. 12,000 from Rs. 16,000. Revenues through international gateway operations have continued to increase.

Increase in international incoming traffic volumes mainly through VOIP operations have contributed to the increase. The competitive nature of the local market has shown a slight drop in IDD call revenue. Data related revenues have shown a healthy growth. This includes the broadband and narrow band products.

By September 2007, SLT had about approximately 45,000 ADSL connections and 82,000 post paid internet customers. Additionally, SLT provides domestic and international leased services and IPVPN facilities to corporate customers.

SLTL’s wholly owned subsidiary and mobile operator Mobitel (Pvt) Ltd., recorded a strong growth in the first nine months of operations in 2007. The subscriber base increased over 60 per cent to 1.11 million in September 2007 compared to corresponding period of last year.

Growth in subscriber base has been the key driver of revenue where the first nine months of 2007 witnessed a 26 per cent increase to Rs. 4.9 billion compared to the corresponding period in 2006. This growth has resulted in growth in all key profitability indicators.

While EBITDA increased by eight per cent to Rs. 1.6 billion in the first nine months of 2007, Mobitel was able to make a profit of Rs. 43 million compared to Rs. 167 million losses made during the same period of 2006.

On August 27, 2007 the Supreme Court delivered the judgment on the legal action initiated the “Consumer Association of Sri Lanka”. Customers will be entitled to an 8.72% overall reduction on local call charges and rentals effective from January 01 to October 31. This credit will appear in the bill for November.