Despite adverse macro conditions the telecom sector in general recorded modest growth levels, but oligopolistic conditions within the mobile telephony sector drove prices in favour of the consumers making Sri Lanka one of the lowest in call charges in the region. The intensity of competition in all forms despite increases in market penetration affected the profit growth trend experienced by the telecom sector. Some industry players were compelled to adjust, revamp and rationalise their businesses in the face of the changing industry landscape, but Sri Lanka Telecom Mobitel, spurred by the response and results of its investments in new technology, processes and products thrived and raced forward, building in the process new market spaces and seizing new opportunities.
Sri Lanka Telecom Mobitel continues to benefit from the reputation and strength of its parent, Sri Lanka Telecom, and as the National Mobile Service Provider finds itself in a privileged position gaining from the knowledge, experience, infrastructure, resources and fullest backing of the National Telecom Service provider and lead fixed line telecom operator in the country.
Sri Lanka Telecom Mobitel continued its buoyant thrust on building the market and financial strength during the year. The phenomenal growth did not come by accident but by the result of a meticulously planned and executed strategy that has put Mobitel on a growth trajectory and mood of promise. Achievements of Sri Lanka Telecom Mobitel cannot be fully appreciated unless viewed in the context of the dismal position the Company had to recover from before making any quantum leaps to command even the semblance of a chance of establishing its position in the market. This the Company has done successfully within a short turnaround period because of the fortitude, financial backing and guidance of Sri Lanka Telecom.
The Early and Mid Years
An early entrant to the Mobile telephony market in
Sri Lanka, Mobitel commenced operations in 1993 on the AMPS standard, later to be upgraded to a DAMPS platform. Under market supply driven conditions for a brief period of time the Company enjoyed marginal strength in a relatively small and static market dominated by postpaid customers. Mobitel soon found itself fast losing relevance with the popularity and growing demand for services based on the GSM standard because of the superiority, higher acceptability and versatility of the GSM based technology. Recovery and Consolidation was not an option but a requirement if the Company was to remain a going concern.
Sri Lanka Telecom having entered its own phase of growth and consolidation, guided by good foresight, equipped with the financial strength and endowed with an abundance in knowledge and competency increased its stake in the ownership and control of Mobitel by buying out the majority interest held by its joint venture partner of the Company in October 2002 whereby Mobitel became a wholly owned subsidiary of Sri Lanka Telecom.
Within a period of just over a year, in January 2004 Mobitel successfully implemented and commissioned its
fully-fledged 2.5G EDGE/GPRS enabled GSM network designed to operate on dual band. Albeit positioning itself within the tagline Simple & Amazing, limitation of the 1800Mhz Spectrum stifled any prospect of matching the competition on value added services rollout and local and international coverage. Market reach, breadth and depth suffered due to an inadequate and poor distribution system. High gearing and low asset utilisation coupled with mounting bad debts predominantly due to defaulting postpaid customers fast rendered the Company cash strapped. In the final analysis having found itself in a situation of Over Promised and Under Delivered, brand diffusion started to take effect and a crisis was looming.
Catching Up
Under the stewardship of Sri Lanka Telecom, the new management of the Company with the active participation of its best resource - its committed and competent employees - fully aware of the need of a quick but durable and effective plan for success reached for the drawing board, and since then have not looked back. Mobitel immediately aligned itself to assume the role of the National Mobile Service Provider and commenced a comprehensive repositioning exercise with a distinct focus on customer centricity and choosing true to its renewed focus the new tagline 'We Care. Always.'
By December 2006 having phased out the AMPS network and completed the user migration from AMPS to GSM, Mobitel became solely a GSM service provider.
In late 2005 Mobitel augmented its brand with that of Sri Lanka Telecom under the name and style of Sri Lanka Telecom Mobitel. The high brand equity of Sri Lanka Telecom offers great strength to the Company in the formation of the Company’s bonding and trust with the market.
Turning Point - Pursuing the Prepaid Market
Driven by a strategy evolved around value innovation and with the threefold objectives of appreciably strengthening the renewed brand perception, maximising asset utilisation and becoming a formidable player in the prepaid segment, the Company introduced its revolutionary Prepaid product SMART 5 in March 2006.
SMART 5 has been a great success and the imitation of the product characteristics and style by the competition in their own campaigns is testimony to the SMART 5 success.
Prepaid volume of Sri Lanka Telecom Mobitel increased by 500,000 in its first year and YoY growth increased steadily, reaching a level of 1.9 million in 2008.
Further to gaining market share SMART 5 has positively contributed to the financial and liquidity position of the Company resulting from upfront cash collections and reduced bad debts.
The New Growth Phase - M3
Lagging the competition by ten years in GSM adoption, it is difficult to dislodge the incumbent market leader or deny its first mover advantages. Building a position of future market leadership requires the creation of Blue Oceans and Sri Lanka Telecom Mobitel is on course to leading the way in 3G technology, the latest generation of mobile technology poised to cause paradigm shifts.
In December 2007 Sri Lanka Telecom Mobitel launched M3, its 3.5G High Speed Packet Access (HSPA) technology based service capable of 14.4Mbps on downlink and up to 1.98Mbps on uplink. The network is expected to offer speeds of 20Mbps on downlink and 12Mbps on uplink in its next evolution, which at present is under trial.
Sri Lanka Telecom Mobitel is the first and only operator in all of South Asia and among the top ten networks in the world to implement a Super 3.5G network.
The 3G technology employed by Sri Lanka Telecom Mobitel has the advantage of future proofing investments in technology upgrades,and importantly offers unparalleled service quality, be it in voice and video telephony, high speed internet, video streaming, mobile TV, music streaming, online music and other non-voice services.
The Mobitel Philosophy
Technology, unless offering benefit, value and capable of improving the quality of life of the consumer is meaningless and of no consequence. Customer Centricity is of core importance at Sri Lanka Telecom Mobitel; hence the Company strategy is one of ‘Value Innovation’. Technology, distribution, products and packages, added services and support are only means to an end, and at
Sri Lanka Telecom Mobitel, the end is about caring for the customer and always having their best interest at heart.
Value Innovation at Mobitel then is not guided by the principle of first to market, but by the principle of right for market if not best for market.
The nimbleness and agility of Mobitel Team spirited by a sense of ownership and volunteerism and fuelled with a passion for excellence has been core to realising Mobitel’s challenging operational and strategic goals and strictest conformance to best business practices. To this end, Mobitel draws inspiration from the advice of the twentieth century great physicist Albert Einstein; 'We have to do the best we can. This is our sacred human responsibility'.
Coverage and Distribution
The wide and expanding GSM network of Mobitel at present covers 70% of the geographical expanse and about 95% of the population. The Company is rapidly expanding the number of base stations and hopes to by mid-2009 have 2000 base stations operational, and this would include base stations in newly cleared areas in the country. A large part of the areas covered are also 3G enabled, and this satisfies the findings of a trial group survey that people desire very good broadband access with a semblance of mobility from at least three different locations.
Mobitel embarked on a plan of expanding its international reach, and through an established international roaming network spanning the globe, offers a range of voice and video services at competitive rates to the international traveller.
A formidable distribution network capable of extensive reach complements the Company’s strong product offering. The 1,000+ outlets comprise own branches, Singer Mega Outlets, SLT Offices, Online Dealers, Post Offices (for Prepaid services), Banks and Keells Super Markets (Payment Centres) and Arpico Super Centres. Leading the way in value innovation, Prepaid and Postpaid customers are also offered the convenience of managing their Mobitel accounts through the branch networks of National Savings Bank.
Coinciding with its M3 product launch In December 2007 Mobitel launched its plush and spruce Flagship Store developed around a store-in-a-store concept offering Nokia, Sony Ericsson, HTC, LG, Motorola, Samsung & Huawei. The Mobitel Flagship Store designed to showcase the M3 products and accessory range also offers the opportunity to experience 3.5G in action in an aptly harmonised luxurious surrounding. In 2008, the M3 Flagship Store was upgraded with five-star touch to include the M3 Café operated by Hilton Colombo. Busy customers could also at their own convenience settle bills, top their Prepaid accounts in real time 24 hours a day, 7 days a week using the Citibank provided multimedia, trilingual touch screen automated kiosk system also located at the Company’s Mobitel Flagship Store.
2008 - Beating Expectations against the odds
2008, for many telecom companies maybe a year best be forgotten, but for Sri Lanka Telecom Mobitel it was a year to stand up and be recognised.
Mobitel, clear in its resolve and focus to grow its core business, harnessed its technological and market prowess and broke new ground in captive segments.
Well placed to exploit the fast converging modes of communication, the Company rolled out M3 Journalist, a live 3G video calling facility of particular use to the media. Stemming from a commitment to Value Innovate, Mobitel upgraded its SMART suite of Prepaid offerings by pioneering free bundles of on-net outgoing calls/SMS with its SMART Freedom. The offering is in three flavours: Weekly/Daily/Hours and free bundle of Internet use and video calls with its 3G Daily Delight. This initiative made SMART the smartest Prepaid offering which addresses the widest needs spectrum.
As the National Mobile Service Provider, conscious of the needs of a broad cross-section of the people and sensitive to their respective economic considerations, particularly under conditions of rising cost of living, Mobitel innovated product offerings to suit both Prepaid and Postpaid customers. Number portability within the Mobitel network allowed customers to switch between Prepaid and Postpaid packages and from the Company perspective it provided the advantage of flexibility in product development.
Flowing from the proactive stance adopted by the Company to value innovate and adapt due to flexibility, Mobitel created history in Sri Lanka by introducing the UPAHARA Postpaid package designed specifically with State Sector Employees and Pensioners in mind. The UPAHARA Package launched together with State Trading (General) Corporation, offers State Sector Employees and Pensioners the opportunity of calling any local fixed line number or Mobitel number free of charge and receive calls from any network free of charge, subject to a Fair Use Policy (FUP), and all this at a nominal charge of Rs. 240/- per month.
The demand for the UPAHARA Postpaid package has been overwhelming with more than 500,000 Post-paid subscribers registering for the service within the first four months of the launch of the package.
Although many telecom operators observed a decline in profitability and liquidity during the year, for Sri Lanka Telecom Mobitel, 2008 was a year of outstanding success. Overall subscribers grew by over one million to reach a subscriber base of 2.7 million by end-December 2008. An interesting statistic is that in the history of Mobitel it took 14 years to reach the first one million subscribers making 2007 a significant milestone, but it took only one year to reach the second million in 2008. Revenue grew by 72% to over Rs.12 billion and Net Profit After Tax crossed the Rupees one billion mark.
 |
|
 |
| History was created in 2008 when Mobitel introduced the UPAHARA Postpaid package designed specifically for State Sector Employees and Pensioners |
|
A joint product of Mobitel and the University of Colombo, mLearning is set to break through traditional boundaries addressing learning shortcomings through advanced technology |
| |
|
|
 |
|
|
Mobitel introduced an all-encompassing subscriber
registration system as directed by the TRC whilst managing customer convenience |
|
|
Investments committed by the Company in its 3.5G/2.5G networks and service offerings amount to over
US$ 300 million.
Creating Value through Public Partnerships
As the National Mobile Service Provider, Sri Lanka Telecom Mobitel believes in the real prospect of value added services and synergies through selective collaborations and partnerships. The Company collaborated with
Sri Lanka Post to increase its prepaid penetration through the Postal Network. Mobitel established collaboration with the Immigration Department and redesigned immigration cards thus enhancing its brand awareness among the international travellers while in the process aiding in electronically capturing data of national importance by the Immigration Department. Mobitel also successfully collaborated with State Trading (General) Corporation to launch UPAHARA.
With a view to promoting mLearning, a unique and novel approach to making Higher Education accessible to everyone, anytime, anywhere Mobitel is collaborating with the University of Colombo. mLearning, also known as mobile learning is the teaching and learning process through the use of mobile and hand-held devices such as Mobile Phones, Personal Digital Assistants (PDAs), Laptops and Tablet Personal Computers. A joint product of Mobitel and the University of Colombo, mLearning is set to break through traditional boundaries as well as address traditional learning shortcomings through advanced technology.
In adherence to the directive issued by the Telecommunication Regulatory Commission of Sri Lanka to register all subscribers, Mobitel introduced its
all-encompassing subscriber registration system. With a view to minimising the inconvenience to customers, Mobitel provided registration facilities at 65 Mobitel centres across the country. A convenience in the form of the use of MMS facilities to transmit photographs and issuance of a temporary Mobitel Identification Certificate was offered as an alternative.
Awards
For the third consecutive year Mobitel won the “Best Consumer Pull Award” for Sri Lanka at the SAARC Voice and Data CEO Conclave Awards held in Hyderabad in India.
Mobitel also won first and third places for the Best Commercial at the 2008 Sumathi Awards.
The Institute of Engineers of Sri Lanka honoured Mobitel with the “Excellence in Engineering Award” for the Best Engineering Organisation.
 |
 |
 |
| |
|
|
| Best Consumer Pull Award |
Sumathi Awards |
Excellence in Engineering Award |
Way Ahead
Propelled by the vision to “Lead Sri Lanka towards an
Info-com and Knowledge Rich Society through our service offerings” and viewing the entire country as one Mobitel family, Mobitel will in 2009 - the Year of ICT and English - commit itself to drive Mobile ICT, strengthen its technological leadership, strive for optimum asset utilisation and through a deliberate programme of Thought Leadership pursue among other things a position of cost leadership. Growth in 3G and Broadband will strategically figure in future value innovations of the Company.
With a clear focus on Value Innovation, Mobitel is swayed heavily towards continuing to create Blue Oceans based on developments on the 3G-front with a view to claiming leadership in that uncontested market space ripe for growth.
|
