SunTel achieves WiLL growth at a cost

Sri Lanka’s second largest fixed line telco SunTel says its wireless in the local loop (WiLL) subscriber base rose to 188,000 at the end of December 2005, up from 85,000 a year earlier. The cost of the growth was a 66% year-on-year fall in net profit in the second half of the year to LKR172 million (USD1.679 million), despite revenues for the six-month period growing to LKR2.97 billion, up from LKR1.9 billion in 2H 2004. SunTel has revealed plans to raise USD80 million to fund a three-year WiLL network expansion programme, despite the government saying it will increase tax on its CDMA handsets to 33% from the current level of 18%. SunTel is the larger of the two competitors to Sri Lanka Telecom (SLT) in the fixed line market, with WiLL rival Lanka Bell reporting a subscriber base of 40,000 at the end of 2005, almost unchanged in the year.