Lanka Bell, which has asked for Expressions of Interest from interested buyers for bids on the company, may re-think its decision to sell as it’s on the way to profitability, according to company sources.
“From last year August onwards the company’s profits are good,” a source told the Business Times, adding that regulation in the telecom industry has helped the company turnaround. In February last year, Lanka Bell was seen as dragging its parent, Distilleries Company of Sri Lanka’s (DCSL) profits down. DCSL owns nearly 100% of the company.
The source said the Telecommunications Regulatory Commission’s (TRC) directive on minimum floor price on call charges, the drop in Telecommunication Development Charges (TDC), TRC’s introduction of an Interconnection regime and cost controls by the company have all helped in this fixed line operator’s earnings growth.
“TRC’s floor price on calls granted all telcos a comfortable zone while encouraging them not to compete in an unhealthy way,” he added. TRC in July directed minimum outgoing call rate at Rs 2.
The source added that the Interconnection regime, (which is the fee charged by the call receiving party from a call originating party; E.g.; from Dialog to Mobitel) has helped the company’s profits. “This set of legal rules, technical and operational arrangements between network operators that enable customers on one network to communicate with customers of another network has helped the company’s turnaround,” he noted.