Sri Lanka It's Happening

April 20, 2007

For the past three years, Dialog Telekom has been trying to shoot itself in the foot without actually suceeding. Today it looks like they have finally managed it with the announcement of their rights issue.

The rights (1 for 10) are priced at Rs 21 per share but the market price before the announcement was made was only 25.5 . That makes the difference barely 18%, when you look at the possible XR price it's just 16% hardly what you might call attractive in this bear market. And the investors reacted appropriately by driving the prices down by 2.00 Rupees so the difference between is now just Rs 3.5

Dialog started shooting wild when they missed the opportunity to buy out Lanka Bell. Lanka Bell with the CDMA 2000 network has started eating in Dialog market in the provinces. Instead of Lanka Bell, Dialog chose to buy out a shell of a company that just had a license to operating a CDMA network. That was two years ago but they haven't rolled out their CDMA 2000 offering to date.

In the meantime, Dialog has come out with a WCDMA based 3G offering. This service leaves much to be desired but at least it's there. But it's presence probably means their CDMA 2000 offering might be still born. Though the protocols are related there is a big gap and the same equipment cannot be used to serve both types of phones. So if they support both CDMA 2000 and WCDMA they are effectively building two parrallel networks. No wonder they need a rights issue.

Posted by raditha at April 20, 2007 6:12 AM