Dialog Axiata PLC | Annual Report 2010 D ia lo g A x ia ta P L C | A ...
Dialog Axiata PLC | Annual Report 2010 D ia lo g A x ia ta P L C | A ...
Dialog Axiata PLC | Annual Report 2010 D ia lo g A x ia ta P L C | A ...
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The positive dynamics of the Sri Lankan economy in <strong>2010</strong> unfurled on the backdrop ofa progressive deve<strong>lo</strong>pment roadmap laid out by the Government and its deve<strong>lo</strong>pmen<strong>ta</strong>gencies. A cohesive policy framework has made way for large-scale infrastructure andrebuilding projects across the island, strengthening the case for enhanced and manifoldexpansion of <strong>lo</strong>cal and foreign direct investments.The Government has espoused with clarity, its vision to drive sus<strong>ta</strong>inable growth throughthe facili<strong>ta</strong>tion and encouragement of investments across multiple sectors, with a specificemphasis on underserved communities and regions. A well-founded fiscal managementpolicy has main<strong>ta</strong>ined inflation at sus<strong>ta</strong>inable levels resulting in the expansion of disposableincome available for consumption across the telecommunications and info<strong>ta</strong>inment sectors.In the mobile sector, subscriber growth continued to be aggressive, with the numberof mobile subscriptions increasing by 23% to 17.4 Mn. In contrast, the number of fixedtelephone lines increased by 4% to 3.58 Mn. leading to an overall telecommunications sectorsubscriber growth of 19% to reach a to<strong>ta</strong>l subscriber base of 20.94 Mn. Mobile penetration(mobile connections per capi<strong>ta</strong>) reached 82% at year end, leading fixed-line penetrationwhich is estimated at 17% by a significant multiple. In line with subscriber growth, estimatedda<strong>ta</strong> for the mobile industry indicates a growth of 16% in sector revenue YoY albeit on thebackdrop of price reductions which continued to drive affordability and inclusive serviceprovision. With respect to sector profi<strong>ta</strong>bility, published da<strong>ta</strong> indicates that mobile sectorEBITDA grew by 48% in s<strong>ta</strong>rk contrast with the negative trends experienced in theprevious year.The re-es<strong>ta</strong>blishment of sector profi<strong>ta</strong>bility and sus<strong>ta</strong>inability was bolstered in significantmeasure by an agenda of intuitive structural transformation init<strong>ia</strong>ted by the regulator. Thetelecommunications sector saw the introduction of a domestic interconnect regime in June<strong>2010</strong> which served to assert a fundamen<strong>ta</strong>l techno-economic construct for inter-networktraffic f<strong>lo</strong>ws and cost recovery. The regulator also moved to curb the wave of industry valuedestruction created through unabated price war behaviours described more-fully in myreport last year, through the introduction of a f<strong>lo</strong>or price regime.While the f<strong>lo</strong>or price prompted affordability enhancement as a primary outcome, pricingcer<strong>ta</strong>inty and the curbing of value destruction contributed in no small measure to thereconstitution of a profi<strong>ta</strong>ble industry and the motivation of a new wave of Foreign DirectInvestment. The regulator also commenced measuring and reporting quality of serviceindicators per<strong>ta</strong>ining to broadband services, moved to enhance consumer protectionmechanisms and adjusted levies per<strong>ta</strong>ining to international telecommunications serviceswith a view to achieving the dual objectives of growing traffic f<strong>lo</strong>ws and industry revenues.8<strong>D<strong>ia</strong><strong>lo</strong>g</strong> <strong>Ax<strong>ia</strong><strong>ta</strong></strong> <strong>PLC</strong><strong>Annual</strong> <strong>Report</strong> <strong>2010</strong> |Group Chief Executive’s Review of Operations
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