Multinational Companies have already express their concern

EquityChamp

EquityChamp

Moderator

Posts : 4068
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 And the technology gets outdated for every three years time so that a telco company need to invest continuesly.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
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
Join date : 2011-02-20

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 And the technology gets outdated for every three years time so that a telco company need to invest continuesly.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
Join date : 2011-03-30

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
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 : 5193
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 : 15429
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

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