Mobitel Performance

Mobitel (Private) Limited, a fully-owned subsidiary of Sri Lanka Telecom,

accounted for 47% of SLT Group revenue in 2014. Mobitel offers Mobile
telephony, high-speed broadband, enterprise solutions, IDD and a host of valueadded services with island-wide coverage. Mobitel was the first operator in South
Asia to launch a super 3.5G network, the first to make a successful
demonstration of HSPA+MIMO technology and the first to trial 4G/LTE technology
successfully. The recent introduction of Dual Carrier HSPA+ technology and 4GLTE service makes Mobitels broadband service the fastest in the country.
International roaming is available with over 400 networks worldwide. With USD
500 million - worth of investments made to date, Mobitel has played an
important part in shaping Sri Lankas ICT landscape, and presently boasts a
customer base of over 5 million. The evolution of Mobitel (Pvt) is as follows.

Since 2002, Mobitel, has layed the foundation for future growth of the group. It is
now Sri Lankas second largest mobile operator. The company had taken several
initiatives to become the number one position. It has taken innovative products
and value added services to capture the market share and also to ensure the
sustainable growth.
The rollout of Mobitel state-of-art-GSM network with EDGE/GPRS in 2004,
the companys active mobile subscriber base has grown by 48% with the market
share of 19% within a year. And it continued to grow at 211% till 2006. During
this period the company incurred losses due to the high investment cost and
corresponding depreciation charges. (Table 1) However the coverage and
distribution wide and expanding GSM network of Mobitel covers 70% of the
geographical expanse and about 95% of the population.
In March 2006 the company introduced its revolutionary Prepaid product
SMART 5 and it 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 691,650 in its first year and YoY growth increased steadily, reaching a level of
4.17 million in 2014.
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. (Sri Lanka Telecom PLC Annual Report 2008)
In December 2007 Sri Lanka Telecom Mobitel launched M3, its 3.5G High Speed
Packet Access (HSPA) technology based service capable. It has increased the
subscriber base by 270% within one year. (from 2007 to 2008) during this period
the company turned around to make profit. (Table 2)

As the National Mobile Service Provider, conscious of the needs of a broad crosssection 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. 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 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 endDecember 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.
Mobitel (Pvt) Limited A Stellar Performance True to its stated intent as part of its
2009 review, Mobitel delivered a stellar performance in 2010 in all aspects of its
business. Recovering from a dip in profits in the previous year that was due to a
consolidation of its position, in 2010 Mobitel takes great pride in reporting an
operating profit of Rs. 2.3 billion and a net profit of Rs. 1.5 billion. This profit is
derived from a combined 30% growth in revenue over the previous year as well
as from a well-managed cost structure. In 2010, Mobitel revenue reached Rs. 20
billion. Having embarked on a drive to offer superior products and services
comparable to any world-class operator, over the last five years Mobitel
consistently invested in the best and latest technology and in network
expansion.
Further Mobitels enhanced customer experience through ever conscious of the
need to match the growing market demand and committed to offering a superior
customer experience, continuous expansion and upgrade its network and service
range has led to a growing base of loyal customers, and in 2010 the Mobitel
subscriber base reached 4 million subscribers while the mobile industry globally
crossed five billion subscribers in 2010 - an important milestone.

In the year of 2014 , Mobitel reported the highest profits in its history recording a
profit of Rs. 2.8 billion. This profit was achieved as a joint result of 11% growth in
revenue over previous year coupled with cost efficiencies obtained through wellmanaged cost structure. In absolute terms, Mobitel crossed the Rs. 30 billion
milestone to record a sales turnover of Rs. 30.60 billion in 2014 compared to Rs.
27.48 billion in 2013, an increase of Rs. 3.12 billion this is an improvement ahead
of industry.
Chief Executive Officer Mr. Ranjith Ganganath Rubasinghs statement
(SLT annual Report 2014)
Customers are becoming increasingly tech-savvy, knowledgeable and
sophisticated. Their requirements are expanding faster than technology driving

innovation in the market. In this milieu, service providers are expected to keep
up with the demand through continuous improvement, innovation and enhanced
service delivery.
To cater to the evolving customer needs we have embraced an all encompassing
customer centric approach by responding to customer demands effectively and
efficiently is enabled due to the adoption of right technologies at the right time.
Further focused more on regional markets to capture the untapped regions ,
Integration of sales, marketing and network operations on a regional basis was
implemented with the aim of achieving the company objectives more effectively.
Additional resources were allocated to areas where Mobitel is lagging behind in
market share compared to competition.

These efforts have paid off. The year under review saw Mobitel achieve
its highest-ever revenues since inception. We have grown faster than
the industry, acquired market share and built on success.
He further added saying that the company Internally preparations were made
during the year for the implementation of a world class performance
management system at Mobitel in consultation with a global leader in HR
consulting.
The system aims to transform Mobitel into a transparent,
performance-driven enterprise where employees are rewarded solely on merit.
Other structural changes are also in the pipeline.
He believes that these changes will make us a more dynamic and competitive
Company in a saturating voice market where broadband and wireless
technologies have catapulted the communication landscape. However,
generating meaningful revenues from OTT services such as Skype, Viber and
WhatsApp will remain a challenge as these data services offer little value to the
service provider. However, with high calibre of people with us and the changes
we have now put in place, I am confident that Mobitel will continue to grow and
prosper in the years to come.

Table 1
Mobitel Customer
Base
2003

2004

2005

2006

2009

2010

2011

2012

2013

2014

Subscribers

143,000

284,430

420,062

885,042

2,686,000

3,382,000

3,324,000

3,832,000

4,520,000

5,029,000

Pre-paid

49,816

90,209

194,233

691,650

1,932,000

2,826,000

2,733,000

3,241,000

3,781,000

4,170,000

Post-paid

93,184

194,221

225,829

193,392

754,000

485,000

592,000

592,000

589,000

612,000

Table 2
Mobitel Financial Performance

Year

Revenue

Profit
before
Interest
Tax and
Depreciati
on
(EBITDA)

Earnings
Before
Interest &
Tax (EBIT)

Net profit
after Tax

0.

2004

2.80

17

-1.06

2005

3.60

81

2006

5.30

2.00

0.70

-0.10

2007

7.00

2.50

1.10

0.30

2008

12.07

4.30

1.90

1.20

2009

15.40

4.10

0.90

-0.40

2010

20.05

6.70

2.30

1.50

2014

30.60

9.80

4.00

2.80

0.
-1.00

Annexure 1

Financial Data of STL and

the Group
Revenue

Operating Cost
STLCompan
Group
y

Profit After Tax

STLGrou
Compan
p
y

Depreciation
STLGrou
Compa
p
ny

Total Assets
STLGrou
Compa
p
ny

Year

Grou
p

STLCompany

1999

18,28
1

18,28
1

8,217

8,192

1,269

1,269

5,003

5,001

71,05
3

71,073

2000

19,60
5

19,60
5

8,501

8,481

221

242

6,120

6,119

82,49
7

82,517

2001

22,06
0

22,06
0

8,877

8,877

2,103

2,105

6,869

6,867

80,21
0

80,212

2002

25,38
3

25,20
7

9,826

9,710

2,685

2,681

7,604

7,558

77,46
8

80,173

25,55
3

24,47
7
26,75
3

10,924

10,024

2,249

2,383

8,241

7,987

72,37
3

68,827

2003
2004

29,58
8

14,129

11,329

1,293

2,621

9,036

8,114

78,77
3

72,540

2005

32,51
5

29,28
2

15,512

12,898

3,093

4,351

9,366

8,952

81,52
0

75,937

2006

40,69
1

36,10
9

17,915

15,351

5,438

5,497

9,964

8,808

84,04
2

79,154

2007

43,23
4

37,06
8

20,748

17,231

5,640

5,388

10,22
0

8,884

85,37
2

78,902

2008

47,04
4

36,11
3

25,095

18,635

7,367

6,601

10,43
1

8,210

93,19
8

81,975

2009

48,07
7

34,08
7

33,740

23,870

778

1,232

11,33
2

7,017

90,22
0

68,550

2010

50,25
0

33,31
1

33,527

23,313

3,943

2,478

11,09
0

8,302

87,03
0

68,502

2013

60,14
4

36,78
1

41,218

26,821

5,419

3,324

11,75
5

6,505

108,6
47

83,090

2014

65,04
0

38,95
0

46,268

29,559

6,001

3,635

12,32
5

6,875

122,6
04

99,017

Capital
workin
gprogres
s

Total

18,785

243,501

Fixed Assets Position of SLT & Group

as at 31st December 2014

Group
Cost
Accumulate
d
Depreciation
Net Book
value of
Fixed
Assets
CompanySLT
Cost
Accumulate
d
Depreciation
Net Book
value of
Fixed
Assets

Freehol
d
building
s

Ducts, cables
and other
outside plant

Telephone
Exchange
s

Transmissio
n
Equipment

Other
fixed
asset
s

3,436

91,524

22,020

72,371

35,365

-1,831

-71,858

-16,052

-35,231

-27,594

1,605

19,666

5,968

37,140

7,771

18,785

90,935

3,409

90,752

22,042

23,058

33,282

18,235

190,778

-1,831

-71,280

-16,077

-15,071

-26,298

1,578

19,472

5,965

7,987

6,984

References
www.slt.lk

-152,566

-130,557

18,235

60,221

http://www.businesstoday.lk/article.php?article=7554#sthash.tdgCW0mt.dpuf