Business Times

Mobile broadband to drive Dialog’s growth

By Jagdish Hathiramani

Sri Lankan mobile market leader Dialog Mobile on Thursday signalled that its mobile broadband products would be the company's key driver for the next few years, especially considering that revenues from its ‘voice’ category continued to dry up over the last two years.

Making this observation was Dialog Mobile Chief Executive, Supun Dep Weerasinghe, who was speaking at the Sri Lanka Telecom Summit, where he further elaborated that this move was due to the sparse 5% penetration achieved to date in the mobile broadband segment, a situation similar to that of ‘voice’ category when Dialog first entered into the Sri Lankan market.

Other areas of interest for the company, according to Mr. Weerasinghe, were mobile Internet and mobile banking. Mobile Internet because 90% of Dialog's users fell into the prepaid category and, for them, this was a product that they may actually need while, at the same time, providing a stepping stone for the company to eventually sign users to mobile broadband. And mobile banking because 50% of all consumers in the country remained “unbanked” and traditional bricks-and-mortar establishments could not adequately service them.

Meanwhile, Mr. Weerasinghe also noted that the local industry faced several issues in 2008/2009, with Dialog itself cutting its capital expenditure budget by as much as 60% last year to account for irrational price cutting by all players in the local market. Some bottlenecks he specified included lack of proper back hall connectivity, a need for basic floor prices to stop irrational price cutting, greater agreement among operators on interconnectivity and a proper regulatory framework, the latter highlighted recently by Fitch which ranked the country as having the highest regulatory risk in South Asia. Added to this were his comments that Dialog experienced the lowest revenue generation in 2008/2009, which no doubt implied a similar situation for others in the local market.

Mirroring Mr. Weerasinghe's sentiments was another speaker at the Sri Lanka Telecom Summit; Vajira Jayasinghe, Chief Technology Officer of Dialog's fixed line and CDMA rival Suntel, who indicated that stagnating revenues and skyrocketing costs were causing a “bad patch” for a local industry already being weighed down by 'insane' price cutting and close to 50% tax on revenues, which he clarified to mean the sum of all taxes on telecommunications and not just those paid to the Inland Revenue office. Interestingly both personalities indicated that they made these remarks off the cuff as they did not expect to speak at the event and only intended to serve as panelists for the event’s inaugural interactive session with the audience.

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