Airtel Lanka plans to launch 4G within current financial year

„Pays TRCSL and approvals taken; performing 4G testing

„Losses expand to Rs.5.4bn in FY19/20, from Rs.3.9bn in FY18/19

„Records higher revenue of Rs.11.5bn supported by value-added services

„Accumulated losses as at March 31, 2020 tops Rs.61bn

„Negotiating financial resources from parent entity and related parties

„Says no intention to either “liquidate, merge or to cease trading”

Bharti Airtel Lanka (Pvt.) Ltd plans to launch its 4G network within the current financial year (2020/2021) while aiming to return to black, as the accumulated losses surpassed the Rs.61 billion mark, as at March 31, 2020.

In its financial statement for the financial year ended March 31, 2020 (FY19/20), Airtel Lanka, a subsidiary of India’s Bharti Airtel Limited, revealed that the company has taken active steps to launch its 4G network in the 2020/2021 financial year, becoming the last remaining telecom services provider in Sri Lanka to launch the 4G network in the country.

“Airtel has paid the TRCSL fee and taken approvals; 4G testing is being successfully performed,” notes to the financial statement said. Airtel Lanka last year said it had secured 5MHZ of the 900MHZ spectrum band from the Telecommunications Regulatory Commission of Sri Lanka (TRCSL).

According to the financials, the company spent Rs.1.22 billion for the renewal of its mobile licence fee and Rs.539 million for additional right of use of assets during FY19/20.

Recently, Bharti Airtel appointed Ashish Chandra, the former Business Head and CEO (Uttar Pradesh and Uttarakhand) for Vodafone Idea Limited, as the new Chief Executive Officer/managing Director of Airtel Lanka, to accelerate Airtel’s growth in the Sri Lankan market.

Meanwhile, Airtel Lanka’s losses expanded to Rs.5.4 billion in FY19/20, compared to Rs.3.9 billion in the previous financial year. Consequently, the company’s accumulated losses surged to Rs.61.15 billion, at the end of FY19/20.

“The directors have made an assessment of the company’s ability to continue as a going concern and they do not intend to either to liquidate, merge or to cease trading,” the notes to the financial statements said.

The interest expense on loans and borrowings rose to Rs.1.13 billion in the period under review, compared to Rs.786.8 million in the preceding period.

The parent, Bharti Airtel Limited, assured additional financial and technical support to Airtel Lanka, to meet the company’s future liabilities, to enable the company to continue as a going concern over the ensuing period of 12 months.

Further, Airtel Lanka entered into a loan facility of US $ 125 million with a related company and the current usage of the facility is at US $ 28 million. The company expects to utilise the unused amount of the credit facility for future expansions.

The company noted that it’s negotiating financial resources from the parent entity and related parties.

Accordingly, Airtel Lanka expects a positive EBITDA and operational cash flows through an 8 percent revenue growth.

Airtel Lanka posted Rs.11.56 billion revenue for FY19/20, compared to Rs.10.72 billion in the preceding year.

The modest growth in revenue was mainly due to the sharp increase in the value-added services (VAS) segment, which rose to Rs.6.8 billion, accounting for over half of the company’s revenue.

In the meantime, the revenue from the prepaid segment fell to Rs.1.87 billion in FY19/20, compared to Rs.2.71 billion in the preceding year. (NF)