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Dear Shareholders
The year 2002 has proved to be a very eventful and successful one
for SLT.
SLT not only consolidated its position as market leader in the industry
but also became the only fully integrated telecommunications service
provider in the country when it acquired Mobitel in its entirety in
November 2002; A successful Initial Public Offering placed SLT as
the largest listed Company on the Colombo Stock Exchange; Following
the completion of five years of stewardship by NTT Communications
Corporation, management control was transferred back to SLT’s
own management team; SLT geared itself to meet the new challenges
posed by the emerging deregulation in the Telecom sector; Amidst all
these very significant events, SLT Revenues and Profits soared to
unprecedented levels.
SLT group’s revenue grew by 15% to reach Rs. 25.4 billion while
Operating Profits recorded their highest rate of growth at 26% to
reach Rs. 7.9 billion. Reduced cost of debt servicing through repayment
of higher cost borrowings and a general reduction in interest rates
combined with containment of other costs enabled a disproportionately
higher increase of 44% in pre-tax profits to Rs. 5.2 billion. This
is the highest pre-tax profit recorded by SLT since its incorporation.
The post-tax profit of Rs. 2.68 billion is also the highest in SLT
since incorporation.
It is well accepted that mobile phones would dominate future growth
in the global telecom industry. Cognisant of this trend, SLT acquired
the balance 60% of Mobitel from Telstra in October 2002. Mobitel with
its DAMPS technology presently holds the third position in the domestic
mobile industry with a market share of 18%. The process of converting
the Mobitel network to a GSM platform has been initiated by SLT. The
new technology combined with the inherent strengths of SLT and the
resulting synergies is likely to make Mobitel a lead player in the
mobile arena.
In line with its commitment to privatize state enterprises, GOSL offered
for sale a further 12% stake of its equity in SLT through an Initial
Public Offering on the Colombo Stock Exchange. This second phase of
SLT privatisation reduced GOSL’s holding to less than 50%. The
success of the issue despite its unprecedented size is a reflection
of the confidence the investors placed in SLT and its future prospects.
Consequent to the issue, SLT now has over 28,000 shareholders, which
makes SLT the most broad-based company in Sri Lanka. I take this opportunity
to welcome and thank the new shareholders who have come on board SLT.
The ending of SLT’s monopoly on international telephony has
prompted timely proactive strategies to counter the emerging competition.
The successful launch of the ‘Sigiri’ calling card in
UK and Europe and the establishment of links with non-traditional
operators in the international voice market are some of the initiatives
taken to augment international revenues.
SLT prides itself on being at the cutting edge of technology. Wider
use of its fibre optic infrastructure has begun. SLT is equipped to
provide IP based services such as SLT Broadband and IPVPN.
An exciting new prospect being pursued by SLT is the setting up of
a Telecom City that will have a single venue Data Centre, ICT facilitator
and Call Centre to provide the latest communications technology and
services under one roof. We have earmarked a 3 1/2 acre land at Welikada
for the Centre.
Driving change and competing aggressively in the market place cannot
happen without one key element-people. I pay tribute to staff of all
grades who have responded in a most commendable manner to the new
challenges brought about by a rapidly changing environment.
It is with pride that I make special mention of the tangible evidence
of employee commitment to higher levels of productivity and achievement,
which was recognised when SLT won the coveted National Productivity
Award in the Service Sector-Large Scale Category for 2002. SLT’s
Annual Report of 2000 was the winner in the categories of ‘Unquoted
Companies’ and ‘Companies incorporated after 1st April
1996’ at the Annual Report Awards Competition of the Institute
of Chartered Accountants of Sri Lanka 2002. At the competition in
2003, SLT’s Annual Report of 2001 was adjudged the Runner-up
in the ‘Services’ category. SLT was also the second Runner-up
in Human Resource Management at a competition held by the Sri Jayawardhenepura
University’s Postgraduate Institute of Management. SLT also
received 13 awards and two certificates of excellence at the Taiki
Akimoto 5S Awards ceremony held in Colombo along with the Overall
Winner Award. On behalf of the Board, I wish to place on record my
sincere thanks to the senior management and all other employees for
their dedicated contribution to the success of SLT.
I acknowledge with gratitude the role of NTT Communications Corporation
who has partnered us in both challenging and exciting times. I also
thank the Hon. Imtiaz Bakeer Markar, M.P., Minister of Mass Communication
and the Government of Sri Lanka for their guiding hand of support
and encouragement. My grateful thanks are extended to all shareholders
for their confidence in SLT.
I also wish to thank my colleagues on the Board of Directors whose
invaluable advice and support has helped steer SLT to the strong,
vibrant and highly profitable entity it is today.
Thilanga
Sumathipala
Chairman |
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