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The Dialog Rebound

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The year 2010 was one of rejuvenation for Dialog Axiata PLC, Sri Lanka’s largest telecommunications service provider. Following a tough 2009, in which most telecoms firms recorded huge losses on account of stressful external as well as internal macroeconomic and industry conditions, Dialog’s management team re-engineered a remarkable comeback to record hefty earnings.


Augmented by continuing growth in mobile telephony subscribers, underpinned by a group wide programme of cost rescaling, supported by a minimum pricing regime imposed by the telecoms regulator and investment in next-generation-network infrastructure, Dialog’s net profit rebounded to LKR 5.05 billion in 2010 in contrast to the loss of LKR 12.21 billion recorded in the previous year.


Dialog Group’s Chief Executive Officer, Dr. Hans Wijesuriya stated in his Message to Shareholders in the Group’s 2010 Annual Report that Dialog “applied parallel focus to the right-sizing and corresponding rescaling of technology platforms, operating cost structures and organisational capacity. In 2010, we continued with similar focus and momentum to rescale multiple dimensions of our business against aggressive time scales”.

Dr. Wijesuriya highlighted the challenging need to implement simultaneously and on a timely basis a multiplicity of impactful structural corrections encompassing process, technology, automation and the optimum deployment of human and other resources, across our multi-faceted business.


“While performance outcomes endorsed our transformation strategies, we remained committed to uphold uncompromised, the standards of service excellence, technology leadership and contribution to the nation and economy, as required of an industry leader” added Wijesuriya.


As a result of these initiatives, Dialog posted consolidated Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) of LKR 15.08 billion in 2010 (an increase of 82% over 2009) on revenues of LKR 41.42 billion (a 14.3% increase over the previous year).

The effectiveness of Dialog’s cost rescaling programme is manifested by the fact that core operating costs (excluding depreciation, amortisation and costs of asset impairment) have in fact declined by 3.2% during 2010. Further, with interest costs falling on the twin impact of lower interest rates and reduced debt levels, Dialog’s consolidated net profit has surged to LKR 5.05 billion in 2010 in contrast to the loss of LKR 12.21 billion posted a year ago.


The year also highlighted Dialog’s increased array of services (i.e. mobile telephony, fixed-wireless telecommunications, mobile broadband internet, fixed-wireless broadband internet and satellite based pay television) reaching over 7 million subscribers.

Commenting on this achievement, CEO Wijesuriya states, “The Dialog Axiata Group is proud to serve over 7 million Sri Lankans from across all provinces of the country, with a cutting edge portfolio of Mobile and Fixed Telecommunications, Broadband and Digital Television services.

Dialog’s service portfolio has been designed on the paradigm of maximising Affordability, Availability, Applicability (utility) and Affinity in line with the founding (4A) tenets of Dialog’s approach to inclusive business”. Through the provision of affordable and multi-modal connectivity to millions of personal users, households and businesses, the company has helped digitally empower multiple strata of Sri Lanka’s society and economy.


With financial recovery taking hold and replete with a comprehensive services portfolio, Dialog is well placed to gain from the emerging opportunities for growth following the end of the near three-decade long military conflict in the northern and eastern provinces of Sri Lanka. In fact, it is for the first time in modern economic history of Sri Lanka that the country will be unhindered by adverse impact of war, providing significant scope for growth for corporations such as Dialog Axiata that have built dominant market positions.

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