Sri Lanka’s top telecommunication services provider, Dialog Axiata Plc is to take a triple-blow to their bottom line in comparison to four other telecom operators as a result of the interim Budget proposals. According to analysts at Bartleet Religare Securities (BRS), the firm is estimated to take a total hit of a massive approximately Rs.6.3 billion for this year. BRS said that however the Rs.6.3 billion estimate includes the onetime 25% taxation of their FY 2013/14 bottom line of Rs.5.2 billion.
The proposals affecting Dialog Axiata Plc are the imposition of a one off levy of Rs.1 billion on companies engaged in commercial operations of the Direct-to-Home via satellite operators having more than 50,000 subscribers in Sri Lanka and generating Rs.2 billion, Impose a one off levy of Rs.250 million on all licensed mobile telephone operators in Sri Lanka generating Rs.1,250 million and the decision by the government to desist mobile facility operators from passing the tax of 25% payable on reload to customers “The telecom sector, with margins already suffering from harsh competition, took severe blows in the interim budget. Out of the three taxes, the more important one will be the recurring absorption of 25% of taxes on pre-paid reloads. The recurring element of this would only be the 25% tax absorption of reloads, which for 2014 we estimate to be about Rs.3.75 billion for the industry. In estimating Dilaog’s impact, we assumed a Rs.500 drop per user per month on DIAL’s current 8.3 million pre-paid subscriber base,” BRS Head
of Research, Nikita Tissera said.
He noted that with the existing rules, the only way forward for telecommunication operators to survive as a going concern in the long run would now be to seriously consider consolidation among the five operators in the industry.
www.nation.lk/
The proposals affecting Dialog Axiata Plc are the imposition of a one off levy of Rs.1 billion on companies engaged in commercial operations of the Direct-to-Home via satellite operators having more than 50,000 subscribers in Sri Lanka and generating Rs.2 billion, Impose a one off levy of Rs.250 million on all licensed mobile telephone operators in Sri Lanka generating Rs.1,250 million and the decision by the government to desist mobile facility operators from passing the tax of 25% payable on reload to customers “The telecom sector, with margins already suffering from harsh competition, took severe blows in the interim budget. Out of the three taxes, the more important one will be the recurring absorption of 25% of taxes on pre-paid reloads. The recurring element of this would only be the 25% tax absorption of reloads, which for 2014 we estimate to be about Rs.3.75 billion for the industry. In estimating Dilaog’s impact, we assumed a Rs.500 drop per user per month on DIAL’s current 8.3 million pre-paid subscriber base,” BRS Head
of Research, Nikita Tissera said.
He noted that with the existing rules, the only way forward for telecommunication operators to survive as a going concern in the long run would now be to seriously consider consolidation among the five operators in the industry.
www.nation.lk/
No comments:
Post a Comment