Surge in demand helps Sri Lanka Telecom to record higher revenue, profits in third quarter

Sri Lanka Telecom PLC (SLT) reported stronger top and bottom line results for the three months ended in September (3Q20) as demand for telecommunication services surged as the pandemic upended how people work, shop, educate, interact and entertain. 

The telecommunication behemoth with the fully owned mobile services provider, Mobitel (Pvt) Limited, recorded revenues of Rs.23.07 billion for the three months to September, up 8.4 percent from the same period last year.  Mobitel brought in the bulk of the revenues as people used mobile data and voice services than fixed services. 
The group reported earnings of Rs.1.20 a share or Rs.2.2 billion for the July-September period compared to 83 cents a share or Rs.1.5 billion in the comparable period last year.

Despite the immediate-term adverse impacts on collections and investments, the telecom sector was an early winner of the pandemic as the nature of the virus forced people to interact virtually than in-person. According to sector analysts, the COVID-19 added a huge flywheel to the broader technology and telecommunication sector and accomplished years of planned growth in less than a year.

“Adverse impact to the macro economy due to the COVID-19 pandemic and restrictions for business operations of many companies during the early stages of the pandemic have caused pressure on revenues, growth plans and scheduled investments of SLT,” the company said in the interim results.  “In the short run, the company experienced a positive impact in areas such as Broadband, IPTV and Career Business services due to the surge in utilisation in the residential sector, as well as in the business sector with the shift towards work from home arrangements in continuing the businesses. 

In addition, future opportunities are emerging with novel digital products and services,” it added. 

The segmental information for the nine months financial results showed fixed ICT operations of the group logging a revenue of Rs.38.1 billion compared to Rs.37.4 billion in the same period last year. 

Meanwhile, the mobile operations recorded revenues of Rs.32 billion compared to Rs.29.9 billion last year. 

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