Mobitel plans to break away from SL Telecom
Mobitel ( Pvt) Ltd, Sri Lanka’s national mobile service provider, will operate as an independent entity exiting from Sri Lanka Telecom after functioning as its subsidiary for more than 14 years.
The company will be listed in the Colombo Stock Exchange (CSE) this year with the aim of broad-basing the ownership of Mobitel which is a fully owned subsidiary of Sri Lanka Telecom, official sources disclosed. Details of the listing and other steps are yet to be finalised.
This decision of the future of Mobitel was conveyed to the Cabinet Committee on Economic Management (CCEM) recently.
The government will exit partially or fully from non-strategic investment in Mobitel and several other institutions including Lanka Hospitals, Hotel Developers PLC (Colombo Hilton), Hyatt Residencies, Waters Edge and Grand Oriental Hotel.
The government’s policy in state owned enterprises will be driven by the strategic placement of its investments in relation to the economy, a note submitted to the CCEM revealed.
According to the note, such action will allow the government to raise at least US$1 billion to settle the existing uneconomical, questionable and high cost debt that the present government inherited from the previous regime.
When contacted over the phone for further clarification, Minister of Telecommunication and Digital Infrastructure Harin Fernando told the Business Times, that the government has decided to tackle over-capacity in Sri Lanka’s telecommunication industry while making Mobitel a strong operator by broad-basing the ownership.
The government has decided to separate Mobitel from SLT as it is keen to streamline its portfolio of investments, he said.
The overcrowded mobile phone industry remains the key medium-term risk to telecom operators in the country, he said, adding that Mobitel would be allowed to operate independently.
This company, a subsidiary of SLT is managed by a separate administration even at present and operates on its own, he pointed out emphasising that the proposal to allow it to run as an independent entity after listing in the CSE was also included in the 2016 budget.
Mobitel accounted for over 45 per cent of SLT Group revenues and it is the highest income earner among SLT’s eight subsidiaries.
Mobitel, which started operations in 1993, became a wholly owned subsidiary of SLT in October 2O02.
The company is currently in the midst of expanding its network of base stations to 5300 nationwide, from the present level of 3500, an endeavour that will see its coverage expand to 100 per cent of the population.
(Bandula)