'Sri Lanka's telecom industry competitive'

Indunil HEWAGE

The overcrowded mobile phone industry in Sri Lanka should go for mergers and acquisitions with intensifying competition eroding profitability. Sri Lanka’s Telecom industry has been overcrowded during the last couple of years and this remains the key medium-term risk to telecom operators in the country.

Sri Lanka’s mobile industry is one of the most competitive markets in the region with five operators competing for a total addressable population of 21.7 million and the competition among the five operators, Dialog, Mobitel, Etisalat, Airtel and Hutch is expected to remain high in years ahead and Trevor Mendis ,Course Director, IIHE for University of Wales, UK BSc and MBA programmes said.

He made these views addressing a seminar on “Strategic Business Growth

Through Mergers Acquisitions and Restructuring” organized by the Charted Management Institute (CMI) UK along with KPMG.

Anilana Hotels Ltd MD Asanga Seniviratne said “In many cases, companies resort to mergers or acquisitions because they believe that it is the easiest and fastest way to growth. However, local business societies still fear to getting involved in mergers and acquisitions. In Sri Lanka, most of the mergers and acquisitions are led by the side broking industry. However, Sri Lanka does not seem to have specialized companies in the practical deal making area. If the level of competition is very high, only option is to go for acquisitions or mergers, otherwise, rivalry will take over. When you’re negotiating, you have to make sure that the team that you have is on your side in practical deal making area, sometimes you will find your members are working against you. Secrecy is very important in a country like Sri Lanka and it is key to have a trustworthy team when it comes to making a good deal. Today, family franchises are moving out and getting equity and world expertise in. One of the biggest issues we are facing in our industry is trying to break this family tradition.”