Friday, 24 January 2014 01:02
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SLT denies interest, Hutch confirms negotiations
Hutch’s island-wide 3G broadband coverage the icing on the cake
By David Ebert
Sri Lanka Telecom is reportedly negotiating a buyout of local mobile service provider Hutch for a reported but as yet unconfirmed price of $ 115 million dollars.
The offered price is higher than the $ 110 million that was supposedly offered by Etisalat for fellow mobile operator Airtel, in news that was reported recently and subsequently denied by both companies.
Sources told Daily FT that a high profile team from Sri Lanka Telecom has been in discussions with Hutch since December, in a move that could see SLT merge Hutch’s islandwide coverage and 3G infrastructure with their own national mobile service provider Mobitel, a move which would significantly expand its own network in a highly cluttered sector that currently has five service providers battling it out for market share dominance.
A Hutch spokesperson confirmed over the phone that negotiations have been ongoing since December 2013 but added that “nothing was concrete”.
In contrast, an SLT spokesperson denied any plans of taking over Hutch and could neither confirm nor deny any ongoing negotiations in this regard. The respective CEOs of both companies were unavailable for further comment.
Hutch currently offers innovative post and pre-paid mobile packages tailored towards rural customers with unique affordable tariff packages and reportedly enjoys a loyal customer base, which, as sources said, makes the sale all the more lucrative for an operator such as SLT’s Mobitel.
The icing on the cake from this deal will most definitely be the expected boost to Mobitel’s broadband services with the merging of Hutch’s countrywide 3G broadband infrastructure and GSM 900 frequency that has many benefits compared to Mobitel’s GSM 1800 frequency.
The GSM 1800 frequency has been found to be prone to interference from certain CDMA bandwidth frequencies in use in neighbouring India, which play havoc on uplink and downlink speeds. This move could put Mobitel in an advantageous position within the local mobile sector with no major capital expenditure necessary in revamping its broadband infrastructure.
Having launched its GSM services in 2004, Hutchison Telecommunications Lanka Ltd. currently operates a GSM/EDGE supported network using 900/1800 MHz. The company in 2012 also launched HSPA+ broadband services using a 2100 MHz bandwidth.
Today Hutch also boasts the second largest 3G broadband network in Sri Lanka with coverage in all 25 districts of the country. The company also offers value added services dependent on real market needs and continues to expand its coverage nationwide.
As a member of Hutchison Asia Telecom, the company’s capabilities derive from being a part of Hutchison Whampoa Ltd., a global Fortune 500 multinational company based in Hong Kong with diverse interests in 52 countries.
Hutchison Asia Telecom’s mobile telecommunications operations span across the emerging markets of Indonesia, Vietnam and Sri Lanka. Hutchison Whampoa Group’s telecommunications division which includes the 3 Group comprises of 3G operations in Australia, Austria, Denmark, Hong Kong, Ireland, Italy, Macau, Sweden and the UK.
The SLT share price is currently at Rs. 37 as of Tuesday (21) and has shown signs of stabilising since a downward tumble from a month long high of Rs. 39.40 to Rs. 36.60 two months ago.
