Going Global

Dialog Telekom, still the market leader in a heavily contested Sri Lankan telco market, made 'history' yesterday by becoming the first mobile operator to penetrate the freshly liberated North/ East markets.

"Killinochchi and Mullaittivu were commissioned at around 11am yesterday morning followed by Mankulum, Pooneryne, Elephant Pass and Thunukkai" said a statement released by Dr. Hans Wijayasuriya, long standing CEO of Dialog Telekom.

The North Eastern markets offer big opportunities to telco providers with the prowess to invest. Its rlatively high income levels will mean almost instantaneously high revenue inflows, together with the opportunity for early entrants to consolidate power in a potentially very lucrative market. However, this will depend on regulation and other non regulatory barriers created by the government.

Airtel meanwhile, is sticking by its promise to invest some $200mn in its Sri Lankan business. Although its original timeline of 18 months to 2 years will be extended somewhat.

Both Dialog and Airtel are said to be interested in purchasing Tigo which is said to be put on the market by its parent company Millicom. Such a consolidation will essentially divide the telco market among its three largest players; Dialog, Airtel and SLT mobitel. All three have the capacity to provide a three pronged service platform of Internet, TV and Telecommunications.

Hutch, the other small player aside from Tigo, will be left with a small share of the pre-paid mobile market and will most probably be absorbed by a larger player if the sale of Tigo happens. Such consolidation is a sign of heavily contested and competitive markets, and happens when smaller firms find it increasingly unable to cope with the price squeezing and heavy competition that happens when big players fight each other head on in maturing markets.

The North East markets will provide a fresh spurt of growth to the comms industry, perhaps a good time to purchase some stock.