IFC commits US$ 100m to Dialog Telekom

Shirajiv Sirimane

Speaking at the financing to Dialog Telekom to expand its telecom network and build a new telecommunication infrastructure network with a US$100 million package he said the current penetration is around 32 per cent. "This will reach the 40 per cent mark by the end of the year.

He also said that the active participation of the four-telecom operators has also helped to achieve this growth.

He said that by the end of 2008 there would be 100 percent population coverage. "This currently is around 90 per cent," he said.

He said that Dialog introduced SMS roaming to the region. "One reason for Sri Lanka to be ahead of technology in the region is that regulators have granted permission faster that other countries. It has taken over four years for some countries in the region to grant approval for SMS roaming," he said.

Wijayasuriya said that they were delighted that IFC has reinforced its commitment to Dialog's growth story. Building on the relationship seeded in 2004 through a long term financing arrangement. We are strongly encouraged that IFC has increased its participation in Dialog in the form of equity and expanded debt financing.

We are also appreciative of the high degree of market sensitivity displayed by IFC in structuring a tailor made financing package to meet the company's needs and opportunities".

The 100 million package for five years includes a US$ 70 million term loan facility and a US$ 30 million equity commitment via the acquisition of a 1.6 per cent holding in Dialog from Telekom Malaysia (TM).

The loan facility will enable Dialog to improve public access to affordable and reliable telecommunication services by increasing capacity and extending coverage, particularly in rural and under served areas. The US$ 30 million equity commitment will also facilitate a potential improvement of liquidity for DIAL shares in the market.

The funding will be deployed towards partially financing Dialog Group's "quadruple play strategy". A significant portion of the proceeds via the debt financing will be channeled towards augmenting coverage and capacity in the mobile network in order to consolidate and grow market leadership and product leadership in the segment.

Investments will also be made in the Fixed Line, Broadband and Digital Television media businesses.

Minister of Investment Promotion and Enterprise Development Dr. Sarath Amunugama ma said telecommunication is one of the fastest growing industries in the country and it is also powering the service sector.

"The government held the monopoly of this sector before and with the liberalistion of the industry telecommunications have broken new ground," he said. IFC's Head of Investments for Sri Lanka and Maldives, Jeetendra Marcelline, added, "IFC sees Dialog as a key partner in Sri Lanka. The teams worked closely on the new package, which helps address a multitude of Dialog's needs."

He said that this is their single largest investment in Sri Lanka.