Dialog reports Q1 group results

23 May 2008

Sri Lanka’s largest mobile operator by subscribers Dialog Telekom has announced financial and operational results for the three months ended 31 March 2008, including subsidiaries Dialog Broadband Networks (DBN) and Dialog Television (DTV). In a statement the company reported that its core mobile business continued to deliver robust performance, ending the quarter with a subscriber base of 4.55 million, representing 35% growth year-on-year, and an estimated market share of 53%. Mobile revenue growth during the same period was however relatively modest, at 8% to LKR8.22 billion (USD76 million) on the back of a substantial downward revision in tariffs in December 2007. The tariff revision was one of several initiatives carried out during 2007 aimed at expanding the mobile user base through affordability to counteract macro inflation. Cost expansion, driven in the main by general inflation (23.8% y-o-y), energy derived costs (42% y-o-y), and expansion of the company’s network infrastructure, with associated increases in network related costs (52% y-o-y), and depreciation (60% y-o-y) resulted in a 24% decrease in mobile EBITDA and a reduction in core net profit by 47% on an annual basis.

The fixed line services operated by DBN achieved a subscriber base of 72,433 (157% growth quarter-on-quarter), fuelling revenue growth of 116% during the same period. DBN also demonstrated early-stage revenue growth from its WiMAX-based Broadband Wireless Access (BWA) network. Dialog TV achieved similarly aggressive inroads into the pay-TV market – reaching a subscriber base of 77,506 (300% growth y-o-y).

Dialog’s consolidated Sri Lankan group revenue increased by 13% year-on-year to LKR8.98 billion in Q1 2008, whilst EBITDA declined by 23% to LKR2.74 billion and net income fell by 54% to LKR1.11 billion.

Sri Lanka, Dialog Axiata