The digital revolution is turning the world into an all-pervasive information system. Superfast broadband is driving this revolution in transforming the global economy and lifestyles, be it in creating new business models, improving process efficiencies, reducing costs and much more. However, to achieve full potential, it also calls for overcoming certain hurdles, particularly those of a technical, behavioural and regulatory nature.
As the flagship national ICT solutions provider and the national backbone network operator, we at SLT are at the forefront of this revolution in Sri Lanka. Ours is a two-pronged strategy that supports national ICT imperatives while delivering long-term value to shareholders.
Having just celebrated two decades of Internet in the country, one may want to ask how we have fared. Sri Lanka has done well among peers in lower middle income countries on broadband adoption. A recent study indicates that out of 10 key performance indicators, Sri Lanka has outperformed the average in terms of eight, namely, political and regulatory environment, business innovation environment, affordability, skills, business usage, government usage, economic impacts and social impacts, while lagging behind on two – infrastructure and individual usage.
In response, we are continuing to invest in infrastructure, notably in high speed optical fibre broadband and mobile broadband technologies specially focusing on 4G LTE. To drive retail penetration, our ‘Speed Up’ campaign launched in 2015 promotes fibre and LTE services countrywide. We increased the coverage of SLT Wi-Fi network to more than 200 sites and completed the migration from the legacy network to the next generation network during the year. More are on the cards, such as the completion of our Rs. 5.2 billion investment in the SEA-ME-WE 5 submarine cable system in 2016 that will take the country’s global connectivity capacity to a new Terabits level.
Going beyond infrastructure, we also invest in our people – our very own ‘corporate backbone network’ – who continue to deliver superior results. We realigned our organisation structure during the year along four ‘centres of excellence’ focused on planning, sales, network operations and service delivery. We are also introducing process improvements through projects on enterprise resource planning and customer relationship management.
I am happy to report that all these measures have helped the SLT Group to maintain its leadership position in the country’s ICT industry. They also make us well prepared to face future challenges.
Group revenue in 2015 rose by a modest 4.6% while operating profit increased by a commendable 18.9% over the previous year. While these are sound results that have also remained consistent over the past, the temporary setback in profitability during the year was due to a large foreign exchange loss arising from the steep depreciation of the Sri Lanka rupee and due to the additional taxes imposed on mobile operators. Nevertheless, shareholders will be glad to note that we are declaring a first and final dividend for the year 2015, which is on par with the dividend declared in the previous year.
Shareholders and others reading this Annual Report 2015 will notice a change in the reporting format. This is an integrated report that seamlessly blends both financial and non-financial disclosures in the context of sustainable value creation and capital formation. It is about how we invent and re-invent our future through a robust business model built on scanning the operating environment, setting objectives, developing strategic plans, measuring performance and evaluating the outcomes continually with strong emphasis on best governance practices.
In conclusion, I wish to thank all our customers for their unwavering loyalty, our employees for their dedication and solid results and our regulators for their supportive vision in driving the rapid development of the country’s ICT industry as a whole.
I thank my colleagues on the Board of Directors for their contribution and counsel. The year under review saw Messrs Krishantha Cooray and Firdouse Farook resigning from the Board. I thank them both for the support and guidance they provided during their tenure. I am also delighted to welcome Messrs W K H Wegapitiya and Rohan De Silva to the Board. We appreciate the skills and experience they bring to our deliberations and decisions.
Finally, but not least, I wish to assure shareholders that we remain committed to adding value to their investment and look forward to their continued support.
P G Kumarasinghe Sirisena
29 March 2016