Bharti Airtel tops in investment in Sri Lankan telecom sector last year

 

By Telecom Lead Team: Telecommunications sector in Sri Lanka received $69 million
investment in 2011. The industry received this boost from five operators, Sri
Lanka Telecom, Dialog Axiata, Etisalat, Bharathi Airtel and Mobitel.

 

The biggest investment to the sector
was made by Bharti Airtel Lanka, a subsidiary of Bharti Airtel, one of the
world’s largest telecom service providers, which was the fifth player in the
local mobile market. The company invested $49.9 last year.

 

Malaysian based Dialog Axiata also
invested last year to the tune of US $31.8 million.

 

The company’s main focus last year
was laying of the fiber optic cable. This was mainly to increase its broad
penetration and to give faster broadband.

 

Dialog Axiata is also being
recognized as the first company under its aegis to reach the foreign direct
investment milestone of one billion dollar. Dialog Axiata surpassed the one
billion dollar cumulative investment milestone as at December 31, 2010 and at
the completion of the rapid network expansion program would reach a total
investment of approximately $1.2 billion since inception.

 

Dialog also entered a Share Purchase
Agreement (SPA) to acquire 100 percent of ordinary shares of the wireless fixed
line operator Suntel Ltd from its current shareholders.

 

The certain execution of the
acquisition will follow the meeting of conditions precedent to the transaction
defined in the SPA. Meanwhile Etisalat too made heavy investments last year
pumping $30.8 million.

 

This was mainly to widen their
coverage and for other infrastructure development.

 

The Dubai based firm acquired the
Sri Lankan Tigo unit form Luxembourg listed Millicom for $207 million and since
then have had invested aggressively with the main focus on the expansion of
their 3G network, according to a report in Daily News.

 

The Sri Lanka Telecom’s Mobitel,
last year focus too was on the laying of the fiber optic line in a bid to match
competition and had invested $16.7 million last year.

 

Sri Lanka’s telecommunication giant
Sri Lanka Telecom (SLT) plans to further invest Rs five billion in its mobile
subsidiary, Mobitel.

 

In a disclosure at the Colombo Stock
Exchange, the SLT announced that funds invested will be used by Mobitel for
expansion in terms of coverage, capacity, and network modernization.

 

This investment which will be on
staggered basis is expected to be made within a period of six months.

 

The Sri Lanka Telecom invested $8.4
million last year.

 

In April 2011, BOI granted approval
to phase II of Telecommunication, IP, Broadband, Infrastructure Expansion
[TIBIX] project.

 

With this approval, SLT is entitled
to import project related capital goods on duty free basis during the project
implementation period of two years. SLT’s spend for the expansion project will
exceed $187 million.

 

Meanwhile, India has attracted
foreign direct investment (FDI) to the tune of $1,901 million during March 2011
to September 2011.

 

FDI in Indian telecom sector touches
$1901 million during March to September 2011

 

This
is significant as FDI in telecom industry during the fiscal 2010-11 was $1,665
million. In financial year 2009-10, India had received FDI of $2,554 million.

 

Foreign
investment in telecom sector during 2008-09, 2007-08 and 2006-07 was $2,558
million, $1,261 million and $478 million.

 

Foreign
direct investment is one of the important sources to meet the requirement of
huge funds for rapid telecom network expansion. The FDI policy provides an
investor-friendly environment for the growth of the telecom sector.

 

The
Indian telecom sector has witnessed a commendable growth over the past two
years. With an overall subscriber base of 914.60 million and a teledensity of
76.03 percent, the sector continues to grow from strength to strength.

 

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