SLT recorded a revenue of Rs. 36.11 billion which resulted in a marginal decline of 2.6% as compared to the previous year. This was mainly due to the Company facing intense competition during the year from mobile operators and wireless operators which resulted in tariff reductions. The tough economic conditions faced in the country also impacted the general usage resulting in lower volumes of traffic.
Domestic Revenue
This consists mainly of the revenue generated from fixed line rentals and call charges. This accounted for 42.9% of total revenue as against 45.9% in 2007. The domestic revenue decreased by 9.0% to Rs. 15.52 billion in 2008 as against Rs. 17.04 billion in the previous year. This was mainly attributable to significant reduction in rentals.
CDMA
Revenue from CDMA services amounted to Rs. 5.13 billion in 2008, a 17.0% decrease in comparison to last year's results of Rs. 6.19 billion. CDMA revenue accounts for 14.2% of the total revenue. New connection tariffs reduction as well as lower usage volumes was the main factor that contributed to the decline in CDMA revenue.
Over 100,000 new CDMA connections were established during the year resulting in the total CDMA customer base to exceed 500,000. The Company plans to initiate new attractive packages in the CDMA arena to boost this line of revenue.
International Revenue
Total international revenues declined by 3.9% to Rs. 8.81 billion. This comprises international call revenue, receipts from other network operators and international settlements. International call revenue accounted for Rs. 1.54 billion whilst international settlements accounted for Rs. 7.12 billion. The decline was unavoidable even though the IDD rates being reduced by 45% to 86% depending on the country in order to stay in line with competition and to stimulate usage. The Company would engage in more competitive offers to improve usage. The IDD facility was opened for residential PSTN customers as a first step in this endeavour.
Data & Other Operating Income
Data, Internet protocol (IP) services and other sector revenues increased significantly to a record Rs. 6.66 billion in 2008 compared to Rs. 4.67 billion in 2007. An impressive 42.6% growth when compared with last year.
The Company maintains its strong position as market leader boasting a market share in excess of 60% in internet related services. The broadband customer base at the end of 2008 is almost 100,000 which accounts for a market share of over 50%.
This source of revenue is expected to increase substantially in view of the investments made in the latest IP technology, IPTV and further service offerings utilising the undersea cable network.
Operating Costs & Depreciation
The Company has done well to maintain its operating costs. Operating costs including International Telecommunications Operators’ Levy (ITL) and Voluntary Retirement Scheme (VRS) increased by a marginal 3.9% to Rs. 30.11 billion in 2008.
Staff costs increased by 7.1% to Rs. 5.87 billion, a considerably lower increase as compared with the previous years increase of 20.0%. This is mainly due to 273 employees accepting the VRS scheme. The VRS costs incurred in 2008 amounted to Rs. 390.46 million as against Rs. 43.41 million in 2007.
Repairs and maintenance expenditure increased by 28.3% to Rs. 1.97 billion
Provision for doubtful debts increased by 52.5% to Rs. 1.58 billion. This was on account of recovery issues on CDMA phones and connections given on installment schemes. Enhanced credit control measures were introduced which is expected to reduce bad debts in CDMA during 2009.
Depreciation charges amounted to Rs. 8.21 billion as against Rs. 8.88 billion in the previous year.
