COMPANY PROFILE.........................................................................................................1 ECONOMIC OVERVIEW IN SRI LANKA (related to telecommunication)............................1


Dialog Telekom PLC operates Sri Lanka’s largest and fastest growing mobile telecommunication network. The company is also the largest listed company on the Colombo Stock Exchange in terms of market capitalization (USD 1.62 Bn. as of 31 December 2007), representing 20 per cent of the market capitalization of the Colombo Stock Exchange. Dialog Telekom PLC is a subsidiary of the Telekom Malaysia International SDN BHD. Dialog has spear- headed the mobile industry in Sri Lanka since the late 90s, propelling it to a level of technology on par with the developed world. The Company operates 2.5G, 3G and 3.5G mobile services, supporting the very latest in multimedia and mobile internet services as well as International Roaming in over 190 countries. Dialog Telekom accounts for approximately 57 per cent of mobile subscribers in Sri Lanka and for 45 per cent of the telecommunications sector overall. In addition to its core mobile telephony business, the Company operates a wide portfolio of international telecommunications services, including but not limited to retail and wholesale
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which is 53% of the Market Share and its revenue share is approx 68 % (Estimated). This has lead Dialog Telekom to be the market leader in mobile telecommunication Figure 1 –Dialog Telekom Annual Report. 2007. respectively. (2007 Dialog Annual Report ) ECONOMIC OVERVIEW IN SRI LANKA (related to telecommunication) Sri Lanka is an island of twenty million people and it is administratively divided into 9 provinces and 25 districts. a mobile satellite service. Value-addition in telecommunication grew at lower rate due to price competition.1 percent in 2007. with telecommunication. real estate etc. expanding by 19. the subscriber base of cellular phones & fixed access phones expanded by 57 percent and 90 percent. voice and data services. The Company is also a provider of internet services through Dialog – a fully – fledged Internet Service provider Dialog Telekom also operates Dialog SAT. which services are also one of them. pg148 ) ECONOMIC CHARACTERERISTICS OF DIALOG TELEKOM AND THE MARKET IT OPERATES INDUSTRY GROWTH & BRAND IDENTITY As per the table below. based on leading edge International Gateway Infrastructure. (2007 Dialog Annual Report. The commercial center of Sri Lanka is Colombo while nearby Sri Jayewardenepura Kotte is the legislative capital. as per the Telecommunication Regulatory Commission. Growth in Sri Lanka has been broad-based across three major sectors. During 2007. we can conclude that Dialog Mobile has achieved unprecedented growth during the past few years and it is serving a mobile subscriber base of 4.7 percent in 2007.25 Million. The Telecommunication sector continued to grow at a high pace. pg 25 Page | 2 . The Services sector recorded growth of 7.

(Dialog Affinity) It also consists of over 100 Value-Added-Services. Roaming. Kidz Phone. Call Conference. but internationally too. implementing innovations in the product itself. Example – Breaking News. Example – Post Paid : Super 500 (50x). (2007 Dialog Telekom Annual Report. GPRS. These facts mainly increase the switching cost. WIMAX.2 in the 2007 line up of the “Most Respected” entities in Sri Lanka. 2007. for the “Best use of Mobile for Social & Economic Development”. (2007 Dialog Annual Report. KIT normal. PRODUCT DIFFERENTIATION By improving features. M-Commerce(Ez Pay) in South Asia and it has the lowest monthly Fee package for USD 1. Post Paid Blaster. pg 04 ) Picture 1 – Dialog Telekom Annual Report. Platinum etc. Dialog Telekom has over 75 packages for mobile subscribers under Post Paid. reminding that it is the number one service provider in Sri Lanka.This was primarily due to affordable pricing. Dialog Telekom was first to Launch the 3G technology. Dialog gains the customers attention at regular intervals. KIT per second Billing etc. Call forwarding. pg 25 ) Dialog Telekom Brand has achieved various awards not only in locally. pg 35 The exceptional Customer Service by Dialog Telekom also assists in a great deal to improve Brand image & attract customers. Corporate: Gold 400. Also it has widest coverage in Sri Lanka. Pre Paid : KIT Double. Lite 103. Also it was ranked No. CO50X. Lexus 20. MMS etc. strong distribution & network coverage achieved through aggressive investments on network infrastructure. Prepaid and Corporate and Dialog GSM has highly engaged in Price discrimination by charging different prices for according to the package even though it is the same service offered. which makes the company a strong market leader. Club Vision Gold etc. Page | 3 . It received a Commendation at the GSM World awards 2007.

In reality. Since the existing service. tariff plan. SMS. customer satisfaction strategies. Also thinking about the customer conveniences. In theory. planning and government policies etc. Mobitel. The fifth competitor Airtel who is the largest service provider in India. E-mail. providers are doing well especially Dialog Telekom there is a threat for a new firm to enter the market. Tigo and Hutch.Catering different market segments & satisfying customer needs and wants by differentiation such as above makes the product & service unique and this gains the advantage against the rivals. Dialog Telekom Enterprise Contact Management is a fully integrated multi-channel 24/7 Contact centre handling customer interactions via Web Chat. industry firms are reluctant to enter the market because of the expensive start-up costs such as license. which consists of only four service providers. distribution strategies and the technology should be perfect in order to a firm to enter the Sri Lankan mobile telecommunication industry. infrastructure. however. (Quick MBA) Almost everything such as the uniqueness of the product. THREAT OF COMPETITORS Dialog GSM operates in an oligopoly market. Fax. BARRIERS TO ENTRY/THREAT OF ENTRY It is not only the incumbent rivals that pose a threat to firms in an industry. any firm should be able to enter and exit a market and the profits should always be nominal. it operates a large number of Outlets Island wide comparing to all the competitors. 3G video and IVR. who are Dialog. There is a possibility that new firms may enter the industry and affect competition. In the telecommunication. will also join the market and we expect that it will be a greater threat to all service providers. marketing strategies. entered the mobile telecommunication market in Sri Lanka did not succeed in the industry even though they charge the lowest tariffs rate. which was the last service provider. industries possess characteristics that protect the high profit levels of firms in the market and inhibit additional rivals from entering the market. Page | 4 . Voice. Customer Care and Customer Satisfaction is one of the main areas that Dialog Telekom has been a success in the market. For an example the Hutch. since Dialog has the most advanced technology in South Asia.

this benefit increases the switching cost. In addition. because it has a customer base of 5 million which is more than 50% of the market share and it is still growing. Even though Dialog Telekom charges a reasonable price for the service they provide. SCALES OF PRODUCTION When we consider the Scales of Production in Dialog Telekom. Launching a new product or value added service for Dialog GSM is much more cost effective comparing to the competitors Page | 5 . Dilaog GSM is in a situation which the long run average cost declines as the firm increases the output. This is a one of the main reasons that customers would not switch operators. it is recognized that it is categorized under Economies of Scale.Dialog Telekom Annual Report. it is still higher than the competitor’s price. it has agreements with more than 400 operators around the world. the demand becomes more elastic since customers have more alternatives. So as more competitors become available. they would easily switch to a competitor only because of the price. It has a great opportunity of increasing the output of a product. 2007. (Quick MBA) Dialog has the widest coverage within the island comparing to all other service providers in Sri Lanka. In other words.Table 1 . pg 37 A threat of competitors exists when a product’s demand is affected by the price change of a competitor’s product. so that any subscriber can take the same number across the world. Since most of the people in Sri Lanka consider only about the basic features on a mobile.

International Econ CORPORATE RESPONSIBILITY Dialog Telekom PLC further strengthened its business case within the nascent field of Corporate Responsibility in 2007. Also the Dialog Viyapara Diriya workshops empower retailers to improve their business and lives through a paradigm shift. pg 49 BUSINESS ANALYSIS Dialog GSM has been consistently aggressive in applying its innovation strengths towards enhancing the affordability and applicability of its service to meet the extended connectivity Page | 6 . 2007. backed by ‘Integral’ initiatives that strengthened CR competencies across all levels of the organization.000 employment opportunities only within the Company which doesn’t include Franchise & other retailers.Dialog Telekom Annual Report. Picture 2 . (Dialog 2007 Annual Report) Dialog Telekom has offered more than 5. Dialog has introduced “eZ Insurance” which is a beachhead M-Commerce innovation that harnesses the potential of GSM connectivity to break the nexus between poverty and risk. as well as through sustainable ‘Outreach’ programmes that supported National and Millennium Development goals aimed at enriching Sri Lankan lives.Picture 2 .

Other factors driving revenue growth include the growth in coverage and increases in the volume of international traffic and associated revenues.requirements of consumers across multiple segments and demographies. 2007. Its inclusive approach to pluralizing access to connectivity technologies has transformed mobile telephony from its exclusive positioning in 1995 to a broad based commodity affordable and available to citizens from all walks of life. (2007 Dialog Telekom Annual Report ) SUBSCRIBER BASE Dialog Telekom with its affordable service offering has played a significant role in the Sri Lankan mobile telecommunication industry & this is clearly defined in the following “Growth of Subscriber base” graph. International Telecommunication Levy. The Revenue in Dialog GSM mainly consists of Pre-paid. 2007. Post Paid. Table 2 – Calculations from Dialog Telekom Annual Report. REVENUE & PROFITABILITY The total operating Revenue growth was driven by robust growth in the cellular subscriber base. International Orgination cost. . and Inbound Roaming. International Termination. pg 72 Significient components of Direct costs are Network cost. Roaming costs and Lease circuit rental costs. Telecom equipment depreciation. which translated to the generation of enhanced call revenues. Page | 7 Table 3 – Calculations from Dialog Telekom Annual Report. Dialog Telekom Annual Report. pg 68 Table 1 – Revenue Composition.

Taxation : Dialog has been granted Flagship Investor status by the Board of Investment (BoI) of Sri Lanka by virtue of the quantum of inward infrastructure investments made by Telekom Malaysia. pg 74) CONCLUSION Dialog Telekom is a leading mobile telecommunication service provider in Sri Lanka. CONNECTIVITY Dialog Subscribers in some areas are experiencing call drops & connectivity issues since the customer base is too larger for the existing base stations. we can conclude that Dialog Telekom has successfully faced the challenges up to now. 2006 & 2007 . Price discrimination is highly put into practice by Dialog GSM and this helps it to be a strong competitor in the market. 2005. It has a over 50% of the market share which makes it the market leader. RECOMMENDATIONS Although Dialog Telekom is a strong player in the market. Price elasticity. (2007 Dialog Annual Report. Considering the economical characteristics of the telecommunication industry such as Brand Identity. we can identify that even though Dialog still has more than 50% percent of the market share. they will have to defend it because after 2005 there has been continues decline. which operates in an Oligopoly market. The terms of the Flagship Investor agreement bestow a 15-year tax exemption period on the Company which terminates in the year 2012. Considering the above graph. 1. Threat of competitors and scales of production etc. Dialog Telekom has the latest technologies in their grasp and when it comes to exceptional customer service Dialog Telekom has secured its name on it. In order to Page | 8 Table 4 – Calculations from Dialog Telekom Annual Report. Barriers to entry. it still has to improve and be prepared for future threats and defend its position as market leaders.

2005 Page | 9 . IMPROVE THE STANDARDS OF CUSTOMER SERVICE The employees should be well trained to offer an exceptional customer service. Annual Report. If customer leaves without a smile you have” – Ronan Kaufman In order to keep the employee moral high. but every segment in the market.prevent such situations Dialog should invest on increasing the number of base stations and create customer satisfaction. but for other market segments too. PROMOTIONS Promotions at certain periods will attract the customers to use the facilities more. It doesn’t have to be the cheapest service provider. rewards & benefit schemes should be introduced and implemented quarterly or annually. 3. 5. “If a customer leaves without a purchase you have not failed. since it is the first fact that grabs the customer’s attention. 2. but some reductions with the economical changes in the country. since most customers are concern about basic features of a mobile for the cheapest rate. The promotions must be mainly targeted on the price. Dialog can also introduce special offers and benefits not only for the high-end users. 4. PRICING Dialog should come up with tariff reductions. ADVERTISING Since Dialog GSM operates in an Oligopoly Market. advertising is very essential to compete in the market. REFERENCES Dialog Telekom PLC. The advertisements should be more creative and it should target not only the youth.

com/Trade/Tch80/80img. Porter’s Five Forces. Australia.) (2005). Writing Guidelines for Business Students. L.shtml Page | 10 . A.. South Melbourne. T. Australia. 2008 from http://www. 2007 Emerson.tripod. South Melbourne. (Eds. Retrieved November 22. 2009 from http://internationalecon..quickmba. I. Tucker. Annual Report.Dialog Telekom PLC.).com/strategy/porter...gif Layton. Retrieved January 12.).com/porters_5_forces_analysis. (2005). (3rd ed. Annual Report. Porter’s Five Forces Analysis. International Econ. Retrieved November 21.universityessays. (2nd ed. (Eds.). 2006 Dialog Telekom PLC. Economics for today. A model for Industry Analysis.html Quick MBA. 2008 from http://www. Robinson.

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