Sri Lanka Telecom sees data revenue growing, margins falling

ECONOMYNEXT – Sri Lanka Telecom said broadband data will dominate revenue despite thinning margins and rising capital expenditure with the telco developing its own over-the-top (OTT) platforms for voice, audio, picture and video messaging services like WhatsApp and Viber.

SLT has invested over 70 billion rupees over the last two years to expand a fibre optic network for faster broadband.

"In terms of the telco industry, growth will focus on broadband-related digital services. Broadband revenues will dominate the income statement within the next three years," SLT Chairman Kumarasinghe Sirisena told shareholders in the company’s 2017 annual report.

However, the fibre network with broadband speeds up to 100Mbps will boost third party OTT consumption eating into SLT’s own traditional voice and messaging revenue.

"The year 2017 was another turbulent year for the global and local telecommunication industry as revenue from IDD and other traditional avenues declined due to the threat from OTT players," SLT said in its 2017 annual report.

Also, "margins from data are decreasing while the capital expenditure in infrastructure is on the rise," it said.

However, the telco said it doesn’t see OTT’s as a threat.

"The usage boosted by OTT consumption will fill up the broadband ‘pipes’, thereby contributing towards better return on investment," the telco said, adding that it would develop its own OTT platforms.

In 2017, revenue from broadband and ‘data and other services’ was 27 billion rupees at company level, accounting for nearly 60 percent of total revenue of 44.5 billion rupees.

The share of broadband and ‘data and other services’ to revenue was 38% percent in 2012.





SLT has connected 315 government establishments to the fibre optic network, and will add 545 more by the end of 2018.

It has also connected 2 million homes to the fibre network by the end of 2017 both in terms of fixed and mobile broadband.

SLT also provides IPTV on both its copper and fibre network. (COLOMBO, 18 April, 2018)

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