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PAT (SLR Million)+ 42.9%- > 100%- > 100%(3,910) (1,868) (7,668) (439) (2,233) (2,879) (12,208)4Q 081Q 09 2Q 09 3Q 094Q 09 FY08 FY09An Environment Conservation Levy(ECL) of 2%, although contested incourt, was also imposed on mobilesubscribers during the year.An interconnection costing studywas completed by TRCSL in thesecond half of 2009 and extensivediscussions were held betweenTRCSL and telecommunicationoperators to introduce a cost-basedinterconnection regime. This washowever, not implemented during2009 and is expected to see tractionin the coming year.OUTLOOK FOR 2010Mobile IndustryThe mobile telecommunicationssector in Sri Lanka witnessedaccelerated growth, reaching closeto 68% penetration in 2009. Dialogis the country’s largest mobile serviceprovider with a market share of 48%.A study by Nokia revealed that SriLanka has the lowest Total Cost ofOwnership (TCO) with a mobilephone being less than USD 5, makingit highly affordable, a key driver forhigh penetration rates. Further,liberalisation of the Northern provincewill provide an opportunity forgreater network investments andnew subscriber growth.Competition is stiff with the country’soperators jostling for market position,largely through tariffs and basic nonvoiceservices. Dialog will focus itsefforts in maintaining mobile revenuemarket share whilst rescaling itsoperational structure, modernisinginfrastructure and repositioning itsbalance sheet.Broadband IndustryThe growth in broadband penetrationfell short of industry and InternationalTelecommunication Union’s (ITU)annual growth estimate of 22-25%for 2009-2011. According to TRCSL,internet and email subscriber growthwas 15.6% in 2008, whereas in 2009it only grew by 2.6%. However,i m p r o v e m e n t s i n t h e c u r r e n teconomic conditions and increase incomputer penetration is expected toenhance demand in the future.Fixed-Line and Data IndustrySri Lanka’s fixed telephone sectorexhibited signs of saturation in 2009.Based on TRCSL data, the fixed linecustomer base declined marginallyby 0.5% during 2009. However, withnewly liberated regions opening upfor economic integration and the lowfixed line penetration in the region,the North and East provinces offersignificant growth opportunitiesgoing forward.Pay TV IndustryThe continued economic downturnwitnessed during 2009 curtailedgrowth in the Pay TV sector. Pay TVis still perceived as a non essentialluxury item in Sri Lanka and changingthis mindset has been the singlemost challenging task for the playersin the industry. At present, TVpenetration is approximately 78%out of which pay TV penetration isstill at a very low level and has muchroom to grow when economicconditions turns positive. However,the affordable prices, variety ofchannels and the convenience ofeasy activation led to this sector’ssignificant growth in 2009.Dialog has elevated the user experience to a newdimension through many Sri Lankan firsts and continuousinvestment in technology, deepening its ties with its over6.4 million subscribersAnnual Report 2009 • 123