The Sunday TimesBusiness

13th October 1996



Space-based network from Ceycom

By Asantha Sirimanne

Sri Lanka's newest data communications network hopes to capture a share of the booming market for telecom services, with the use of VSAT (Very Small Aperture Satellite) technology.

"We hope to fill a void in the telecommunication market that exists at the moment," says Ceycom Global Communications Managing Director, Khavan Perera.

Ceycom, a member of the Ceylinco Group hopes to set up a communications network at an estimated cost of Rs 2000 mn over the next five years. The first phase of the which is now becoming operational and costing Rs 500 mn.

VSAT customers use small satellite communications stations with antennae barely two metres across to bounce signals off a geostationary satellite. The signals are then relayed via a central terrestrial earth station called a network management centre back to the satellite and to the mini satellite station of the intended recipient of the signal.

The company's other partners are the Comsat Corporation of USA and Hutchison Corporate Access, a division of Hong Kong-based Hutchison Whampoa group.

Comsat owns the Intelsat and Inmarsat satellite networks and also helped pioneer satellite communications by launching the "Early Bird" satellite in 1963.

Hutchison Whampoa is one of the partners of Asiasat and was one of the founding partners of STAR TV.

Ceycom's hub earth station is nearing completion at a site near Malabe. "However we do provide international point-to-point communications," says Ceycom Executive Director Gamini Gunawardene. This involves the setting up a permanent link with an overseas destination at a fixed annual charge.

As the Malabe earth station is not yet operational, the Hutchison hub station in Singapore serves as the network management centre for international point-to-point links.

Ceycom hopes to sign up with either Intelsat 507, Asiasat 2 or PanAmSat 4 one month before the Malabe earth station becomes operational.

The company hopes to provide a range of non-voice telecom services, with a high degree of reliability when compared with terrestrial communications systems.

"Our systems reliability would be around 99 per cent," says Mr. Gunawardana, "This compares with 60 to 80 per cent for a land based micro wave network."

Service charges are not varied according to distance.

The company would initially provide five services including e-mail and full Internet Access.

Their main product is a full communications management service where Ceycom would set up and manage all data communications facilities of a company.

The company would also set up a communications system for operation and management by the client. Such services are specifically targeted at firms with geographically distributed offices, such as banks.

Other services in the pipeline include a disaster recovery link where a client company would maintain a back-up computer system with, Ceycom, which will take over if the main computers at the clients premises fail.

The company would also provide distance learning facilities and remote diagnostic facilities with the use of "telemedicine chambers".

A patient would be able to walk into a telemedicine chamber and talk to a doctor, in Colombo or abroad for advice.

The distance learning facility would enable a student to follow lessons and talk with the lecturer in a different city or country.

Mixed signals from CSE

Market focus by analyst

Retail buying interest is sustaining the market to level out at ASPI 580-600 marks. It could be expected to trade within these levels in the coming weeks.

Foreign investors were the net sellers with quite a few of them heavily losing-out in Sri Lanka due to the extraordinary bearish sentiments prevailing in the market. This has led some of them to cut their losses and move out to other lucrative liquid markets.

A 51% stake in Udapussellawa plantations fetched a record price for a regional plantation company (RPC) of Rs. 65.25 per share. The plantation was bought by Plantation Management Company (PIMC) a holding of Sri Lanka Insurance Corporation (SLIC) and Merchant Bank of Sri Lanka.

Investors have reacted over the Public Enterprises Rehabilitation Bill particularly when the government is desperately trying to attract foreign investment. It is important that for some of the projects to take-off, investor confidence is restored.

The capture of Killinochchi by the forces is a morale booster but in the context of the economic impact it is of little significance. The government concern to continue with high defence expenditure, which would lead to balance of payments difficulties and increase inflation, has much more of a significant economic impact.

The market has appreciated 6.25% from the beginning of September. It is expected to trade within a narrow range before volatility strikes again. Volatility is expected to be positive and retail driven due to very attractive PBs in most companies. It is not expected to be sustainable in the long-run if foreign investment is negligible.

Large parcels which traded in the review period are DFCC/JKH mostly transacted by foreigners. Richard Pieris is in the middle of a shareholder battle for control, resulting in price appreciating from Rs. 70 to Rs. 100 within a month. Tea Smallholders and United Motors were mainly traded by high-net-worth retailers increasing their holdings in these companies.

Lankan firm exports safety nappies

A Sri Lankan infant clothing exporter has started marketing a safety nappy and a re-usable pamper developed and patented in Sri Lanka.

"The design was evolved during the experience I had with my own baby," says Thimosha Apparels Director Charishma Seneviratne.

The company recently exhibited the new products at five Scandinavian cities including Oslo and Stockholm, with the help of the Sri Lanka Export Development Board.

The safety nappy has no pins and does not seep, Ms. Seneviratne says.

The pamper which is washable, is made out of layers of fabric, with terry toweling used as an absorbent,

Ms. Seneviratne says the product is more baby - friendly than disposable pampers which use hard paper pulp.

The products can stay on a baby for half a day which is the industry standard.

The company is now pursuing the many inquiries it has received from Norway and Sweden.

Meanwhile, local orders have also started to come in especially from the diplomatic community with information spreading by word of mouth, she said.

The company is geared to producing about 1000 units a month at present.

The washable pampers are priced at around the same price as imported disposable pampers. But the washable local product can be re-used for about an year.

Increasing productivity better than chasing

higher price for teas

After all the fanfare and pagentry at the BMICH quite recently, over the completion of 20 years "service" by the TSHDA (Born in 1976) I think it is an opportune moment for those of us, who have served on this board, at any stage, - including myself - to look over our shoulders in a truthful appraisal of the extent to which the functions laid down in the TSHDA law No. 35 of 1975 has been targeted and achieved over 20 years. I quote part II "functions of the Authority" -14 a - to promote or to undertake the development of tea small-holdings (obviously the main concern).

If the UNP had been dawdling over the affairs of the TSHDA for 17 years, never getting their priorities right - factory construction should have gone hand in hand with intensified productivity of tea small holdings, the PA government has failed miserably to follow the recipe for economic growth of low income groups, well over a million in this sector, clearly spelt out, truthfully, by Minister G.L. Peiris in his maiden budget of 1995.

The present complacency brought about by boom prices for green leaf (Rs 20/- per kilo) will also be disastrous in the long run, as it is only intensified productivity, that could keep the producer afloat, during slump times. It is at this point, that the axiom that double the crop at half the price, is a far more sound proposition, than chasing double the price on half the crop, stands out as a beacon to the drifting producer. The price factor is entirely dependent upon the basic principle of economics - strongly linked to the supply and demand position, upon which it hinges.

It was with great expectations that the country listened fervently on Rupavahini, to the budget proposals of Dr G.L. Peiris in his maiden budget of February 95, with the most tantalizing offer - I quote - where self-sustaining growth was hoped to be achieved which would see the low income groups earning more than twice the current income in the year 2000. The average earnings in this group of Rs 2700/- per month in 1994, was hopefully expected to touch Rs 5,800/- per month in the year 2000. This indeed was a soothing balm for the tea small holder sector whose earnings among well over a million of our population in family units derived a montly income well below Rs 2700/- per month from these tea small holdings, of less than a hectare in extent. The present buoyancy in the market is a mere flash in the pan!.

What the TSHDA law No. 35 of 1975 hope to achieve could only be reached by a complete shake up of agricultural practices in the field with the total emphasis on frame building in the infancy of the plant, with equal importance attached to the selection of planting material from the centre of mother bushes of approved clones. The stand per acre must also exceed six thousand bushes per acre, and the application of the young tea mixture in the first two years, must be followed by the use of T,750 in the 3rd and 4th years which is not done today. To what extent has the TSHDA during the last two years paid heed to these crucial factors, and has the TSHDA in recent years set guidelines for the producer of green leaf, on the cost factor depending on yield. Boosting yield, only by frame building, could bring down costs, so vital in slump times. It is at bush level that a lasting solution could be found and not in air-conditioned chambers in Colombo.

In very recent times when the Presidential Commission of Inquiry into the Tea Industry and Trade, was set up I made very strong representations to this Commission. On the crucial aspect of attaining economic viability, by boosting productivity to which I have only had a mere acknowledgment dated 6.10.94 when what I proposed was to go before the Commission on productivity, with vital material gathered from my masters - the European planting community - and not the TRI.

Ever since replanting with VP Tea began with a subsidy scheme, over 35 years ago, let us remember with deep gratitude, senior visiting agents of the calibre of R.J.S Bean of Ederepolla, Bulathkohupitiya, and at a later stage, I.R. Nicol of Talangaha, Nikiadeniya who obtained very favourable results in the field by 'bending' plants in the first year, also promoting "Thumb-nailing" in the nursery. They were not merely theoretical, but had new cleaning opened up that way as opposed to 'centering' advocated by the TRI. In fact though the TRI made a favourable comment on bending in its centenary issue of 1967 - page 188, third subsequent stand has been evasive and fickle.

Our cost factor alone whether it be the COP, or the setting average placed under the microscope will provide us with no panacea for our ills, but it is only a healthier bush with an abundance of maintenance foliage that could enable us to compete with other producing countries of more recent times yet reaping the benefits of virgin soils.

Numerous other ad-hoc measures adopted since VP cultivation began in earnest very nearly 40 years ago have proved to be a mere 'cosmetic facade' in Tea Cultivation with productivity sadly depleted and costs excalating by leaps and bounds.

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