Hutch to invest US$ 200 mn for local expansion | Daily News

Hutch to invest US$ 200 mn for local expansion

Thirukumar Nadarasa. Picture by Saliya Rupasinghe
Thirukumar Nadarasa. Picture by Saliya Rupasinghe

Hutch Telecommunications Lanka (Pvt) will invest US$200 million within the next five years for their local expansion.

CEO, Hutch, Thirukumar Nadarasa said that CK Hutchison and Etisalat Group completed the combination of their operations in Sri Lanka and it would take effect in five months. Upon completion of the sale, CK Hutchison Holdings Limited will have a majority and controlling stake of 85% whilst Etisalat Group will have 15% ownership of Hutch Lanka.

“Mobile merges are very common in the world and we have done this in Australia, Scotland, Spain and Austria.”

“In Sri Lanka there are 5 mobile players and top two operators have a 70% market share. Hence small players like us need to merge to reinvest and offer better advantages to customers and have a better reach. For this we need a larger population than 20 million living in Sri Lanka. To overcome this we decided to merge and become a stronger player.”

He also disclosed that the government was very keen that during the merger there would not be any ‘workers cuts’ or golden hand shakes’ and this was respected. “We currently have 350 staff and would incorporate 500 from Etisalat.

He said that the current subscribers of both networks could continue with their packages while both the 072 and 078 numbers too would not charge. “In five months time Hutch will also be going for a new branding, keeping the brand name Hutch.” Three years ago discussions were on with Mobitel to merge but this deal did not metalize due to various reasons. Both Etisalat formally Celltel and Hutch formally call Link were the first two mobile players in Sri Lanka. Etisalat has indicated that they want to keep their presence in Sri Lanka and this is why a 15% stake remains with them. “They will also have one member in the Board.”

He said that the telecommunication industry is one of most successful sector in Sri Lanka and this was mainly due to government flexible regulations over the past 20 years. Asked if they have plans to merge with Airtel he answered in the negative. He said that with new internet options the IDD market has taken a huge beating. With operations in over 50 countries and over 290,000 employees worldwide, CK Hutchison has six core businesses, ports and related services, retail, infrastructure, energy, finance &investment and telecommunication.

With the merger services will also be combined to provide customers a much larger 2G/3G/4G network and better overall value. Hutch has recently launched 4G services in the Western Province and a nationwide roll-out has also begun. Etisalat subscribers would be able to access the Hutch 4G services once the two networks are fully amalgamated.

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