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Competition is key and
deregulation can only help the consumer. |
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SLT is now reaping the
rewards of its post privatisation
infrastructure investment. |
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A re-engineered blue chip
company. |
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The Economy Revives
SLT’s performance in 2003
took place against the backdrop of a reviving economy.Reduced
defence expenditure and strict financial discipline helped
get the economy back on track. According to Central Bank statistics,
the economy grew at an average rate of 5.6% in the first three
quarters of 2003. The budget deficit fell to a provisional
7.8% of GDP, a significant drop from the 8.9% recorded in
2002. This is encouraging, particularly in the context of
the Fiscal Responsibility Act of 2003, which targets a reduction
in the budget deficit to below 5% by 2006.
Inflation was kept in check while the Central Bank was also
able to effect several reductions in interest rates during
the course of the year. Foreign inflows including direct foreign
investment also increased leading to a sense of buoyancy in
the business sector. The increased optimism translated into
a bullish stock market and the Colombo Stock Exchange had
a record year.
However, for this economic momentum to be maintained, it is
vital that the country does not return to war. I therefore
hope that all major stakeholders will pursue every effort
at negotiating a political settlement and work strenuously
to avoid a return to conflict.
Reaping the Investment Rewards
The year 2003 was significant for the telecommunications industry
in Sri Lanka. It was during this year that 32 new licences
were granted to external gateway operators, which denoted
a new era of competition in this country. It also marked fifteen
years since the first mobile operator entered the market and
a little over twenty since deregulation commenced in this
country. Sri Lanka’s communications environment has
thus changed radically from a state controlled and tightly
regulated environment to a deregulated market in which competition
is key.
Such deregulation can only help the consumer. Higher levels
of competition mean better products, more investment in infrastructure,
higher quality, lower pricing and increased levels of customer
care. Deregulation and consequently competition ultimately
means a better quality of service for the consumer.
SLT’s infrastructure investment since privatisation
is now paying off. Over the past seven years, we have invested
Rs. 63 billion in infrastructure and network development.
We have by far the largest number of fixed line customers
and have over these seven years consistently enhanced the
level of service to them. Our acquisition of Mobitel now makes
us the only operator to offer integrated fixed and mobile
services. With the switchover to GSM and other value added
services, we are confident that we will soon be a leading
player in the mobile market too. Sri Lanka Telecom is therefore
well positioned to lead the telecom sector in all aspects.
With the privatisation in 1997 followed by its successful
listing on the Colombo Stock Exchange in 2002, SLT has re-engineered
itself into one of the most vibrant blue chip companies. The
initial impetus for the transformation came from our agreement
with NTT, which provided the technical expertise to expand
our networks and to restyle our management culture. While
the NTT management contract expired in 2002, SLT continues
to have access to certain strategic and managerial inputs
from NTT.
SLT’s restructuring strategy has involved several elements.
One of our first priorities was to identify people with the
right attitude and expertise for each area of work.
We have given them the autonomy in those core areas and encouraged
proactive and dynamic decision-making. This strategy was supported
by the infusion of professionalism in those areas where such
expertise was required.
SLT has also begun to aggressively diversify its sources of
revenue. The liberalisation of the market demanded that SLT
move from an excessive reliance on fixed line revenue, which
was previously its core business, to other business areas.
Investments have therefore been made in mobile telephony,
wireless loop technology, micro links with an Indian telecom
operator and the Telecom City project. The microwave link
between Talaimannar and Rameshwaram opens access to a 43 million
subscriber base and will significantly enhance traffic volumes
between India and Sri Lanka.
SLT has also introduced a new billing system, which captures
ratings data for invoicing directly from the newly installed
high capacity digital switches, thereby eliminating system
losses and improving revenues and the bottom line.
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State-of-the-art technology
to deliver a new range of high quality voice,
data,
media and entertainment
products while
emphasising customer care, will be an important
part of our business plan. |
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We are ready and well placed
for the new telecom era. |
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The plan for our next phase of growth is to build on the
foundation we have laid. The key is to make SLT not only one
of Sri Lanka’s most profitable companies, but also to
be responsive to customer demands while using technology for
their maximum benefit. Therefore, the use of state-of-the-art
technology to deliver a new range of high quality voice, data,
media and entertainment products will be an important part
of our business plan over the next few years. We are accordingly
undertaking an overhaul of our marketing and sales strategies
with the aim of projecting an enhanced SLT brand. Concurrently
with these developments, we are placing increasing emphasis
on customer care. We are aware that our new products and services
must be driven by customer needs, which means providing customers
with as much options as possible on the products we offer.
In the next few years, we also hope to make maximum the use
of our fibre optic infrastructure to provide IP-based services
such as SLT Broadband, IP-VPN and Internet Data Centres. Through these
new products we will attract high usage corporate customers
and increase network utilisation.
We know that the future will see the integration of telecommunications,
computer applications and media applications. Telecommunications
will soon share bandwidth with information and entertainment.
SLT is ready and well positioned to take on these new challenges
and participate in the next phase of the dynamic and fast
evolving telecommunications industry. The foundation we have
laid will enable us to compete and forge ahead.
Acknowledgements
SLT’s management and staff has been the cornerstone
of the Company’s success. On behalf of the Board, I
would like to thank every member of the SLT team. Without
their commitment and dynamism, we would not have enjoyed the
success we have had. My thanks also go out to the members
of the Board for their unstinted advice and support. It has
been a pleasure to work with everyone of them. I also wish
to express my appreciation to you, the Shareholders of the
Company, for continuing to place confidence in our capability
to drive Sri Lanka Telecom forward. I conclude by assuring
you of our unwavering commitment to increase the value of
your shareholding in the Company.
Thilanga Sumathipala
Chairman |