Dialog Axiata to invest US $ 120mn this year

2015-07-09 03:39:32

Says setting up new submarine cable to boost bandwidth 

By Chandeepa Wettasinghe
Dialog Axiata PLC, one of Sri Lanka’s leading telecommunication service providers, will be making investments of over US $ 120 million in 2015, despite the political uncertainty that has dogged the country throughout the year.

“Political uncertainty of any form will not affect the investments of our business.  Dialog is an exception to the generality. We have been investing aggressively throughout the year and we expect to accelerate,” Dialog Axiata CEO Dr. Hans Wijayasuriya said during the bell ringing ceremony at the Colombo Stock Exchange (CSE), signifying 10 years since Dialog’s public listing.

He noted that Dialog’s confidence to invest in Sri Lanka this year is due to its history—having been founded in 1995—despite being a subsidiary of Malaysia’s Axiata Group Berhad. He said that other foreign investors have been reluctant to invest and are awaiting some political stability.

“We’ve invested over US $ 1.7 billion, which is the biggest foreign direct investment (FDI). This year, for the first half, we’ve invested US $ 40 million in infrastructure across 3G and 4G... we’ve invested around US $ 120 million each year recently and we’re set to match that,” he said.

However, one third of the investments so far this year have been diverted to the setting up of a new submarine cable to increase the Internet bandwidth available to the Sri Lankan customers.

“We’re going to tap into the connection going from East Asia to the Middle East. Our investment is for the path diverting from that line into Sri Lanka. This won’t increase the speed of the Internet but it will provide greater bandwidth to the customers,” Dr. Wijayasuriya told Mirror Business.

He added that fluctuations in speed or downtime between peak and off-peak times would greatly decrease, providing a smooth quality in the service to all customers.

“This will be announced at the latter part of this year and will bring in the single largest infusion of international bandwidth to this country because the submarine cable has a huge capacity and upon completion, we’ll be able to provide it to all the other operators,” Dr. Wijayasuriya said.

He noted that the Internet connectivity of the country in the past had been shared with state-owned Sri Lankan Telecom, which has been investing on submarine cables for all service providers.

He said that other investments for the year will focus on the standard laying down of further fibre-optic cables and setting up new transmission centres to increase coverage.

The investments are coming despite the current regime outlining a Rs.250 million tax on mobile phone operators and a Rs.1 billion one-off tax on digital television service providers, in addition to the super gain tax—all of which the minority government had not been able to pass till the dissolving of the Parliament.

Meanwhile, Dr. Wijayasuriya expressed that positive consolidation of telecommunication operators must happen for the industry to thrive in the country.
“The market is too small to have four to five operators in a country like ours. It’s natural to consolidate,” he said.

However, Dr. Wijayasuriya said that Dialog has not yet identified or evaluated specific opportunities in that regard.

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