Multinational Companies have already express their concern

nalban

nalban

Manager - Equity Analytics

Posts : 231
Join date : 2014-09-19

I am from the Telco industry, Truth is as follows,

1. All telecos in the world going througha hard time due to IDD, Voice and sms revenue decline due to Skype, Whatsapp, Viber app etc (I could provide the source if needed)

2. It is said 3 out 5 will survive by 2016 unless they find new sources of revenues

3. In Europe this has already happened but they are managing due to high data rates .

4. In SL data rates are lowest hence not enough to compensate the losses due to 1

5. Companies like Dialog are further affected in 3 ways due to budget, Tax, reload tax, Pay tv tax.

6. Already bonus is affected, end of year there could be further downsizing. there are about 100000 dealers living from reload business.

7. Dialog has been one of the biggest FDI investors to Srilanka

You could decide the impact to the company and its stake holders . Decision is yours if you are a die hard MY3, RW fan just take this as a fact only. Others please be enlightened.

Teller

Teller

Moderator

Posts : 5640
Join date : 2013-06-25

Hi nalban,you are from telecom industry,hehheeeh. I guess from dialog.:-)

nalban

nalban

Manager - Equity Analytics

Posts : 231
Join date : 2014-09-19

Hi hi teller I am not Very Happy

gamaya

gamaya

Assistant Vice President - Equity Analytics

Posts : 824
Join date : 2011-01-22

soileconomy wrote:A leading telecom operator who is taxed thrice from recent mini budget has already expressed their displeasure and hinted possible trim/exit from their Sri Lankan investment portfolio thorough their parent company.
Another FMCG company have already asked for special concessions from next budget for them to stay here without pulling their investments.

Seems like there is opening for a local operator... Good development at the rate of increase in telephone usage..

bandulawee

bandulawee

Manager - Equity Analytics

Posts : 286
Join date : 2012-02-29

Can somebody also enlighten us about the profits made by these telecom operators in the last three years, How much they benefitted from PBJ's low income tax regime. PBJ who is supposed to be public servant advised all the companies to pass down the taxes to consumers where as these taxes should have been borne by them. If they were asked to bear the taxes they would have cut down all the hand outs spooned out to these vultures like buying vehicles for TRC etc and still made substantial profits.,

EquityChamp

EquityChamp

Moderator

Posts : 4068
Equity Stars : 15418
Reputation : 1014
Join date : 2014-11-05

The profit if you look at in absolute terms then it can be big. But in Telcom industry you have to compare profits with relative investments. Profit is a function of investments. The nature of this industry is to invest continuesly and invest in huge amounts. Because the investments in network is very expensive. And the technology gets outdated for every three years time so that a telco company need to invest continuesly. If you campare the profits with the investments telco players profit margins will be very very low and ROE & ROI also tend to low significantly. The shocks like these will definetely put these operators under serious cash flow problems thereby the quality of networks too will get affected. In the end again again the general public has to suffer due to communication barriers created through poor networks. Remember telecommunication service has become an essential service in this country now but not a luxury service any more. Decision makers have to consider these factors before taking any decision.

Vptilak

Vptilak

Manager - Equity Analytics

Posts : 197
Equity Stars : 5583
Reputation : 4
Join date : 2012-05-01

Senior Citizen wrote:In lighter vein may I ask, is the freedom of expression?

I see this as a tremendous blow to the communication and information sharing. We are used to cheap phone bills and Internet charges.

Most people will not like the higher charges.
How it will affect their personal budgets is a big question especially for the very poor. Even a beggar has a mobile in his hand let alone the garment factory worker or peon.

That is why govt cut 25% tax on call bill.

soileconomy

soileconomy

Senior Vice President - Equity Analytics

Posts : 1504
Equity Stars : 7526
Reputation : 45
Join date : 2011-02-20
Age : 46
Location : Nebraska

EquityChamp wrote:The profit if you look at in absolute terms then it can be big. But in Telcom industry you have to compare profits with relative investments. Profit is a function of investments. The nature of this industry is to invest continuesly and invest in huge amounts. Because the investments in network is very expensive. And the technology gets outdated for every three years time so that a telco company need to invest continuesly. If you campare the profits with the investments telco players profit margins will be very very low and ROE & ROI also tend to low significantly. The shocks like these will definetely put these operators under serious cash flow problems thereby the quality of networks too will get affected. In the end again again the general public has to suffer due to communication barriers created through poor networks. Remember telecommunication service has become an essential service in this country now but not a luxury service any more. Decision makers have to consider these factors before taking any decision.

Exactly. Just looking at profits as a figure will not help to understand the correct picture.we have to consider investments made to gain that profit. If low tax regime helped teleco sector new entrants were not witnessed during last couple of years.Both two big telrco operators remain as leading companies who brought massive foreign investments to SL.

Chanuque

Chanuque

Manager - Equity Analytics

Posts : 262
Equity Stars : 6292
Reputation : 14
Join date : 2011-03-30
Location : Pitipana North Homagama | LK

This is the tug of war between the nation building versus the feeding the mass in Sri Lanka. MY3 Government chose to feed the mass to increase their voters base targeting the 2 / 3 majority. Pro India West wants to keep Sri Lanka at the bay as a unproductive nation so they can loot our resources thanks to their proteges in the island ..

EquityChamp

EquityChamp

Moderator

Posts : 4068
Equity Stars : 15418
Reputation : 1014
Join date : 2014-11-05

This 25% reload tax on pre paid revenue will be amended soon. If you alalyse DIAL financials they will be making losses for the next few years if this is implemented because majority of their revenues are in pre paid form. Ravi definetly got this wrong I would say.

Senior Citizen

Senior Citizen

Senior Manager - Equity Analytics

Posts : 569
Equity Stars : 5182
Reputation : 9
Join date : 2014-11-15
Location : Timbuktu

Chanuque wrote:This is the tug of war between the nation building versus the feeding the mass in Sri Lanka. MY3 Government chose to feed the mass to increase their voters base targeting the 2 / 3 majority. Pro India West wants to keep Sri Lanka at the bay as a unproductive nation so they can loot our resources thanks to their proteges in the island ..

If you really study Roman history you will find that Emperor Nero also began his rule in a "Cutta" way. He played the role of a ruler (For first 5 years) with good governance and sincerely cared for the poor and common man and on the other hand in his private life he did all the villainy and most degrading things. His other life was not that good.

So can history repeat itself but in Sri Lanka?

EquityChamp

EquityChamp

Moderator

Posts : 4068
Equity Stars : 15418
Reputation : 1014
Join date : 2014-11-05

Feeding the mas first to get the energy to build the nation. Not a bad idea going by the Buddhist philosophy Laughing

Sponsored content

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Latest topics

Multinational Companies have already express their concern

21 Re: Multinational Companies have already express their concern Wed Feb 04, 2015 11:00 am

nalban

22 Re: Multinational Companies have already express their concern Wed Feb 04, 2015 11:18 am

Teller

23 Re: Multinational Companies have already express their concern Wed Feb 04, 2015 11:28 am

nalban

24 Re: Multinational Companies have already express their concern Thu Feb 05, 2015 2:51 pm

gamaya

25 Re: Multinational Companies have already express their concern Thu Feb 05, 2015 3:42 pm

bandulawee

26 Re: Multinational Companies have already express their concern Thu Feb 05, 2015 4:25 pm

EquityChamp

27 Re: Multinational Companies have already express their concern Thu Feb 05, 2015 9:49 pm

Vptilak

28 Re: Multinational Companies have already express their concern Fri Feb 06, 2015 7:07 am

soileconomy

29 Re: Multinational Companies have already express their concern Fri Feb 06, 2015 7:44 am

Chanuque

30 Re: Multinational Companies have already express their concern Fri Feb 06, 2015 8:28 am

EquityChamp

31 Re: Multinational Companies have already express their concern Fri Feb 06, 2015 8:39 am

Senior Citizen

32 Re: Multinational Companies have already express their concern Fri Feb 06, 2015 9:16 am

EquityChamp

33 Re: Multinational Companies have already express their concern

Sponsored content

New topics