SLT continues to ride on pandemic-fuelled demand for data and other digital services

Providing a first glimpse of how the broader telecommunication sector fared when distant working and learning became the norm during most of the June quarter, Sri Lanka Telecom PLC (SLT) saw a further uptake in its services from data to voice to other digital solutions, in a reflection of how the virus continues to upend the way people interact, work, learn and seek entertainment. 

Accordingly, Sri Lanka’s largest fixed telephone operator recorded a robust 15.2 percent growth in its top line to Rs.25.3 billion in the April-June quarter (2Q21) over the same period in 2020.

The company’ share ended 50 cents or 1.49 percent higher at Rs.34.00 yesterday. 

The June quarter revenues were higher than the March quarter (1Q21) revenues of Rs.24.7 billion when the things looked much more normal before the third wave of the virus sent the demand for data services up again.

“Top line growth can be attributed to customer-focused delivery of essential products and services, during the pandemic period. SLT-MOBITEL strived to provide residential fibre connectivity and to increase PEO TV and mobile services as customer demand grew,” SLT said in a statement issued separately to its interim results.  

The group’s operating profit growth however decelerated to 2.4 percent to Rs.3.8 billion over the same period last year, as there was a sharp increase in sales and marketing expenses during the period. 

Such costs rose by as much as 31 percent to Rs.2.7 billion over the same period last year. 

Increased advertising on brand unification of SLT and its fully-owned mobile telephone company Mobitel (Pvt.) Limited, heightened marketing communication to win subscribers under heavy competition and to enhance brand visibility appeared to have driven these costs. 

“This strategy led to more customer acquisition, aided by value-added services, competitive pricing and the launch of innovative consumer-centric services such as unlimited data packages,” SLT said. 

The company reported earnings of Rs.2.11 a share or Rs.3.8 billion for the three months ended in June, compared to earnings of Rs.1.50 a share or Rs.2.7 billion in the corresponding period last year, logging a 40.7 percent increase. The bottom line was largely buttressed by an income tax reversal of Rs.605 million, compared to an income tax charge of Rs.413 million last year. 

By June 30, 2021, the National Treasury on behalf of the Sri Lankan government directly held a 49.50 percent stake in SLT while Global Telecommunications Holdings NV, a wholly-owned subsidiary of Malaysian investment holding company Usaha Tegas Sdn Bhd, held a 44.98 percent stake. 

The Employees’ Provident Fund held another 1.40 percent stake, being the third largest shareholder.