The Hindu Business Line : Bharti is no threat, says Lanka’s Dialog

Call way
Dialog holds over 62% of Sri Lanka’s market share.
Its average revenue per user is $4/month (it’s $7 on an average in India).
Bharti to invest $100 million; may offer ‘incoming free’ regime there.
Tele-density in Lanka low; there is enough scope for Bharti to explore.

Thomas K. Thomas

Colombo, Sept. 2 Sri Lanka’s largest mobile operator, Dialog Telekom, does not consider India’s largest cellular player Bharti Airtel’s entry into that country as a threat to its number one position.

The company, which has more than 62 per cent share in the Sri Lankan market, said that Bharti’s strategy to break into the market with low tariffs will not have much impact.

Speaking to Business Line, Mr Nushad Perera, General Manager, Sales and Marketing, Dialog Telekom, said, “We welcome competition in our country because that will expand the market. We do not feel threatened or worried by the e ntry of Airtel. Of course, they are very big players in India but we are big players in Sri Lanka. Our network covers almost 90 per cent of the geographical area and consumers here prefer quality over cheaper services.”

New structures

Mr Perera said that Dialog was not worried if Bharti Airtel decides to drop tariffs or bring in an ‘incoming free’ regime. The average charge per minute is around Rs 2.50 and mobile users also have to pay for incoming calls. In contrast, Bharti is offering incoming for free and an average tariff of Rs 1 per minute in India though Dialog officials said that the cost of offering services in the two countries varies.

“Any new operator will try to drop tariffs as an entry strategy, but we already have operators here who are offering much cheaper tariffs than Dialog but consumers have preferred to stay with us. So Bharti will have a tough time breaking into this market,” said Mr Perera.

Dialog is owned by Telekom Malaysia, which also has 49 per cent stake in India’s Spice Telecom.

3G network

Dialog has already deployed a 3G network including High Speed Downlink Packet Access (HSDPA), which provides data connectivity. In a bid to improve its connectivity in the rural areas, Dialog has partnered with Qualcomm to deploy wireless broadband solutions through micro financing.

Meanwhile, Bharti has announced an investment of $100 million in Sri Lanka. It is expected to enter the country by the end of the year.

Analysts pointed out that with only 30 per cent tele-density in Sri Lanka, Airtel had a good chance of making inroads.

Dialog, which has the cream of the Sri Lankan mobile users, has an average revenue per user (ARPU) which is as low as $4 per month per user. In India, despite having the cheapest tariff in the world, operators get an ARPU of around $7.

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