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Telecommunications’ Technological Magic
This is indeed an exciting time to be in telecommunications. Technology is roller coasting at an incredible speed turning out products almost every week. These new products are making communications cheaper and therefore accessible to a larger group of people. It is making communications more sophisticated and therefore allowing people to do more things than they did previously. It is making communications more user friendly and attracting new customers everyday.

It is not just technology that is making communications exciting. Deregulation and the challenges of competition are making it an exciting time to be in the Industry. Monopolies are bad for entrepreneurship. They deaden creativity and stifle the imagination. Growth comes from the thrust of competition which stimulates human imagination to new heights. Against the backdrop of rapidly developing technologies and deregulation SLT envisages four major roles for the organisation over the short to medium term:
   
 
  • Expanding SLT’s network to retain our position as the dominant player.
  • To introduce new products to the market making optimum use of the new technologies that are being developed everyday.
  • To ensure high quality global connectivity both for voice and data and to see that SLT remains the most preferred provider for Sri Lankan customers and for those Sri Lankans based overseas.
  • To thrive amidst the competition of deregulation to ensure that our levels of customer care are constantly being improved.
  Changing Roles in a Changing Market
In 2003 we paid particular attention to customer care and as part of our strategy regular meetings were held in the regions to develop capacities in those locations. A number of strategic changes were implemented by SLT. Three new Outside Plant Maintenance Centres (OPMCs) were established bringing the total in operation now to four; our Call Centre was streamlined, and a Central Store was set up. In addition a state-of-the-art billing system came into operation. All these changes were geared to providing greater customer satisfaction and to creating the requisite working conditions for our staff.

Strengthening the Network
SLT’s transmission network is equipped with high capacity state-of-the-art optical fibre technology including the 700 km Inter Province Optical Fibre Transmission Central Ring and the Colombo Ring. A Southern Ring will be implemented soon and subsequently the Northern Ring. The introduction of this high technology optical fibre rings significantly strengthens the SLT backbone transmission network, with a high degree of reliability which would eventually put SLT ahead of its competitors. SLT will be able to provide fibre to business more freely in the future.

Significant improvements were also made to our network especially in the North; connecting it with rest of the country.

Venturing into new Avenues
The acquisition of Mobitel and enhancing it with the new GSM technology will enable us to deal with the challenges of competition more effectively. New technologies enabled the introduction of new services such as iDC, SLT Broadband, VoIP and IP-VPN. We will continue in our efforts at providing the best levels of customer service and guaranteeing that the varied interests of our diverse shareholders are equally met.

Charging Forward
Against these developments SLT had another remarkable year. SLT’s Group revenue grew by 1.0% to reach Rs. 25.5 billion. Operating profits decreased by 11%. Pre tax profits were Rs. 3.2 billion and post tax profits were Rs. 2.2 billion.

These results in the midst of liberalisation taking a step change and a VRS costing in the region of Rs. 710 million are noteworthy. They demonstrate the solidness of our foundation and the nimbleness of our decision making processes. They also augur eloquently for our ability to compete effectively in the future.

The revenue generated from domestic telephony, as a proportion of SLT’s overall revenue, continued to grow and accounted for 63% in 2003. This is an inevitable consequence of our tariff re balancing policy and this trend is likely to continue for a few years. Approximately 71% of domestic telephony revenue comes from call charges.

SLT is now the No. 1 capitalised company listed on the Colombo Stock Exchange. Shareholders number in excess of 25,000 making us the Company with the highest number of shareholders as well.

As we have grown over the years we have created shareholder value by developing our core businesses in domestic and international voice telephony whilst diversifying effectively into non voice sector markets as well. We have also established a lean and customer centric organisation.

Our dedicated staff bound by a good team spirit and armed with new management and productivity techniques such as 5S will play a central role in SLT’s vigorous push forward.

Still the Robust and most Dependable Provider
SLT continues to lead the telecommunications industry in this country. For decades it was the only provider. It still continues to dominate even after the entry of string of other operators beginning almost two decades ago. It is the only provider with such an extensive network in the country; and now with the acquisition of Mobitel, it is Sri Lanka’s only integrated telecom service provider. By diversifying into new areas of telecom services we have made our sources of revenue and consequently the Company even more secure and solid.

Leveraging our Strategic Location
Sri Lanka is located at a very strategic position, between South Asia and the Middle East. Sri Lanka’s position at the doorstep of India is in many circumstances similar to Hong Kong’s position vis-à-vis China. The potential of this geo strategic location is tremendous and SLT proposes to make best use of this. A strong network between India and Sri Lanka will facilitate the flow of information and traffic between the countries and between India and other parts of the world, with Sri Lanka being a transit point.

In a bid to enhance our global connectivity we re-commissioned the microwave link between India and Sri Lanka in partnership with Bharat Sanchar Nigam Limited (BSNL). The SEA-ME-WE 3 and SEA-ME-WE 4 Submarine Cable project is on course and is expected to be commissioned in 2005. This would play a pivotal role in the development of the Sri Lankan economy.

Creating a new Image
Never has so much happened in so little time in the telecommunications sector in this country. The industry has evolved rapidly and is able to offer a range of state-of-the-art solutions to domestic customers in tune with global technological changes. Deregulation has accompanied all these changes and the industry in Sri Lanka has truly come of age ready to meet the demands of the new economy. SLT has become a key player, if not the most important player, in these developments.

As the largest listed company on the Colombo Stock Exchange shareholders and customers expect SLT to grow amidst competition and to outpace competitors. SLT is in the process of creating a new brand image as the most dependable communications provider with a promising potential. The image also highlights our capacity to make best use of new technologies and the gilt edged security of the SLT network. SLT’s potential and promise is enormous and the next phase of our operation will be geared to attain this potential.

Appreciation
We are equally responsible to our shareholders and employees; as we are to our customers, and the larger community. Our corporate activities have tried to make winners of all our stakeholders. We know that our profit making strategies cannot compromise on our social responsibilities.

I want to acknowledge the pivotal role played by all our staff spread throughout the country. It is they who are the soul of our institution and I would like to pay a warm tribute to them. My special gratitude goes to the over 1,000 employees who retired through the VRS for the role they played in making SLT the Company it is today and to wish them the very best in their new life.

My thanks to the members of the Board for their advice and inspiration. It is a pleasure to work with everyone of you.

Shuhei Anan
Chief Executive Officer
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