Demonstrating its commitment to foster local sporting talent in an equitable manner, Dialog has pledged its support to a total of 34 schools and 374 players from across all provinces of the country, making way for several new outstation schools to enter the schools’ big match arena.

Commenting on the company’s association with this year’s big match season, Mr. Nushad Perera, Group Chief Marketing Officer of Dialog Telekom said, “Dialog is honoured to once again be the largest sponsor of sports in Sri Lanka. We enjoy a long-standing relationship with Sri Lankan cricket, and the schools’ tourney is the primary channel for identifying and developing talent for our future. In addition to our efforts in the past, Dialog will play a much larger role in developing schools’ cricket this year, and we will promote and foster our young talent in a sustainable and meaningful manner. In 2010, we are transcending boundaries, and have reigned in schools from all over the island including the North and East – a clear demonstration of our will to empower and philosophy of inclusion”

Dialog will power the Thurstan - Isipathana (big match & one day), Joe - Pete (one day) and Royal - Thomian T20 encounters in Colombo, the Kingswood - Dharmaraja big match and Trinity - St. Anthony’s one day  encounter in Kandy, the Rahula- St. Aloysius big match in Matara, Richmond - Mahinda encounter in Galle, Dhamashoka - Devananda big match in Ambalangoda, Kalutara Vidyalaya -  Tissa Vidyalaya encounter in Kalutara, St.Sebastian’s College - Prince of Wales (One day) in Moratuwa, Jaffna Central -  St. Johns big match in Jaffna, Hindu College - Vishananda Vidyalaya big match in Trincomalee, St.Mary’s -Zahira College encounter in Hambantota, Seevali Central - Gankanda Central big match in Ratnapura, St.Thomas - Science College in Matale, St.Mary’s - Kegalu Vidyalaya in Kegalle and the encounter between Bandaranayke College Gampaha and Bandaranayke Central College Veyangoda.

Dialog Telekom has been a prominent sponsor of Sri Lankan Sports and is committed to developing talent in Sri Lanka to international standards. The Company is closely associated with School Cricket, Athletics, Football, Rugby, Volleyball, Rowing and Disabled Sports, and has sponsored national contingents to international events including the Olympics, Paralympics, Commonwealth, Asian, SAF and FESPIC Games.

The Corporate Accountability ratings evaluate and recognise Sri Lanka’s listed companies along multiple sustainable development dimensions, including - but not limited to - their contribution to social, environmental and economic development. Dialog Telekom PLC was awarded a Platinum Rating and was also honoured with the highest ranking from amongst Sri Lanka’s listed corporate entities

Sting Consultants endorsing Dialog’s Platinum rating in its citation stated, “Dialog is a leading proponent of sustainable development in Sri Lanka. The company is a fore runner in maintaining a consistent focus on triple-bottom-line achievement, which takes into account both social and environmental impacts of business, in addition to a focus on profitability. The company employs responsible business practices in addressing the varied expectations of its stakeholders As captured in its 2008 Sustainability Report, Dialog’s business operations are steered by good governance, ethics and transparency principles in order to ensure corporate accountability and responsibility,” said Sting Consultants in support of the Platinum rating granted to Dialog.

Commenting on the company’s No. 1 ranking in corporate accountability, Dr. Hans Wijayasuriya, Group Chief Executive of Dialog Telekom PLC said, “We are deeply honoured by this recognition. We have been consistent in our commitment to delivering social and economic dividends to the communities we serve and the nation at large. Recognition of our paradigm and its implementation, as being best-in-class will no doubt encourage us to be steadfast in our quest to empower and enrich Sri Lankan lives and enterprises through the provision of connectivity. The corporate accountability rating also bears testimony to the highest levels of business ethics and transparency we have maintained across all our business practices; a dimension of the ranking the entire Dialog team can be proud of.”

On the backdrop of strong 4th Quarter performance featuring the Company and the Group recording NPAT of Rs. 1,213 Mn. and Rs. 761 Mn. respectively on normalised basis (excluding non-recurring charges), the Group closed the Year 2009 with a NPAT of negative Rs. 12,208 Mn. Significantly, the recorded NPAT includes non-recurring charges of Rs. 11.05 Bn. arising from one-off adjustments for International Best Practice aligned Fixed Asset treatment, forward looking network modernisation and a portfolio of strategic cost re-scaling initiatives. A major portion (92%) of the non-recurring charges, are non-cash in nature.

Performance Trend Consolidates - Strong 4th Quarter
The Company’s 4th Quarter featured the consolidation of the positive performance trends demonstrated over the previous quarters. Normalised Operating profit (EBITDA) grew 27% relative to the 3rd Quarter to reach Rs 2,987 Mn., signifying the 4th successive quarter of EBITDA growth and an improvement of 2% YoY. Accordingly the 4th Quarter demonstrates a normalised EBITDA margin of 35% up 6% points QoQ and 16% points relative to Q4 2008.

In tandem with EBITDA improvement, Normalised Net Profit after Tax (NPAT) was recorded at Rs. 1,213 Mn. up 228% QoQ further reinforcing the Company’s positive performance trajectory. Full year normalised EBITDA was recorded at Rs. 9,465 Mn., yielding a normalised NPAT of Rs. 1,129 Mn. for the Company.

The Company’s 4th Quarter performance features robust revenue growth of 6% and a reduction in direct costs and Operating costs of 2% and 4% respectively relative to Q3 2009. Revenues for the quarter grew 8% relative to the corresponding (4th) Quarter in 2008. During the 4th Quarter of 2009, Revenue Growth was fuelled by positive gains in the mobile market on the backdrop of aggressive price competition. The Company’s mobile subscriber base stood at 6.37 Mn. representing a 16% growth YoY and a 1% growth relative to Q3 2009. Notwithstanding QoQ improvement, full year Company revenue was recorded 2% down relative to 2008, at Rs. 32,515 Mn.

Supplementing positive revenue performance trajectories, the Company continued to demonstrate significant enhancements to its Operating Cost structure. Direct costs and Operating Costs (excluding depreciation and non-recurring charges) reduced by 6% and 21% respectively, relative to Q4 2008, signifying the quantum impact of strategic cost rescaling initiatives undertaken by the Company during the corresponding period. Full year operating costs reduced by 11% relative to year 2008, primarily driven by reduction in operational overhead, administration, and manpower related expenses.

The Company’s cash flows were similarly strengthened with operating cash flows for 2009 recorded at Rs. 12,326 Mn, a two-fold increase relative to 2008.The 4th Quarter financials also include non-cash non-recurring charges totaling to Rs. 1.96 Bn. Non-recurring charges for the year cumulated to Rs. 10.34 Bn., yielding an absolute (including all non-recurring charges) EBITDA of Rs. 7,889 Mn. and NPAT of negative Rs. 9,210 Mn.

Robust 4th Quarter performance supported by a consistent growth trajectory demonstrated over the previous quarters, the completion of a comprehensive portfolio of Operational and Structural Rescaling activities, and the emergence of a positive business environment in the wake of peace and the resurgence of several regional markets, places the Company in a position of confidence and strength to capture and monetize growth opportunities going forward.

Final Phase of Re-Structuring Charges
The 4th Quarter and correspondingly the full-year financials also featured the final instalment of large scale non-recurring charges arising from Network Modernisation, introduction of International best practice aligned depreciation estimates, Conservative Inventory/Capital Work in Progress provisioning, and one-off impacts from other rescaling activities pertaining to the Company’s operational cost structure and balance sheet.

The Group accounted for a total of Rs. 11.05 Bn. in non-recurring charges during the course of 2009. A major portion (92%) of the said charges is non-cash in nature, and relate to policy driven fixed asset/balance sheet rescaling initiatives undertaken by the Group.

The alignment of depreciation estimates to International (Telecommunications Industry) best practice, feature the reduction of Telco Asset Lives in the context of technology advancement dynamics. The revision of Useful Lives of Telco assets has resulted in a one-off correction to depreciation charges of Rs. 855 Mn. in Q4 2009. The Group has applied similar best practice aligned policies with respect to capital inventory and capital work in progress. The initiation of the said policies, have in turn resulted in non-recurring provisions totalling to Rs. 2.33 Bn.  for the year 2009, Rs. 1.53 Bn. of which, has been accounted in Q4 2009.

The said charges and provisions constituted the final stage of the policy driven balance sheet/fixed asset re-scaling programme undertaken by the Group. When combined with the large scale TDM to NGN network modernization exercise of Rs. 6.0 Bn., carried out in Q2 2009, non-recurring (non-cash) charges for the Year 2009 cumulate to Rs. 9.24 Bn.

The residual 8% (Rs. 903 Mn.) in non-recurring cash charges/provisions impacting EBITDA relate in the main to the Company’s Human Resource Optimisation programme implemented through the implementation of a Two-Phase Voluntary Resignation Scheme (“VRS”). The Company’s Q4 financials feature a one-off provision of Rs. 550 Mn., in lieu of the second phase of the Company’s VRS which is expected to be completed during the first quarter of 2010. The total provision in 2009 for both phases of the VRS is Rs. 904 Mn.

Subsidiary Business
The subsidiaries of the Company - Dialog Broadband Networks (Pvt) Ltd. (“DBN”) and Dialog Television (Pvt) Ltd. (“DTV”) demonstrated similar positive performance trends in the 4th Quarter. DBN EBITDA improved 104% QoQ to Rs. 3 Mn. and DTV EBITDA was recorded at negative Rs. 5.6 Mn. in Q4 2009. Both subsidiaries remained dilutive to the Group recording negative Full Year NPAT levels of Rs. 2,588 Mn. and Rs. 769 Mn. respectively.

DBN revenue grew by 3% QoQ to Rs. 598 Mn. The fixed line CDMA subscriber base grew marginally by 1% as at the end of Q4 2009 to stand at 177,061 subscribers. DBN’s Broadband and internet based service segment continued to exhibit aggressive growth with revenue increasing by 8% QoQ and 57% YoY, while broadband and internet subscribers recorded a growth of 4% relative to Q3 2009 and 39% YoY.

DTV recorded revenue of Rs. 458 Mn. in Q4 2009, up 12% QoQ and 28% YoY. Revenue growth was fuelled by aggressive market performance characterised by a year-end subscriber base of 149,449, representing a 6% growth relative to Q3 2009 and a 22% growth YoY.

Non-recurring charges relating to the subsidiaries totalled to Rs. 1.12 Bn. for 2009, yielding a normalised EBITDA and NPAT of, negative, Rs. 129 Mn. and Rs. 1,501 Mn., for DBN and Rs. 233 Mn. and Rs. 735 Mn. for DTV respectively.

Consolidated Group Performance
Group performance derived from the consolidation of the Company with its subsidiaries DTV and DBN, recorded consolidated revenue of Rs. 9,473 Mn. for Q4 2009, an increase of 6% relative to previous quarter and a marginal drop of 1% YoY relative to 2008. Group costs excluding depreciation and non-recurring charges exhibited a 3% reduction QoQ and a 15% reduction relative to Q4 2008.

In line with the strengthening performance trend characterised by aggressive growth in revenues, re-scaling of cost structures and improvements in working capital management, Group operating cash flows reached Rs. 10,837 Mn., increasing by over 50% on an YTD basis relative to 2008.

The Group recorded normalised EBITDA and NPAT performance of Rs. 3,044 Mn. and Rs. 761 Mn. Respectively, for the 4th Quarter, signifying positive profitability (excluding non-recurring charges) for the quarter at Group Level. Full year normalised performance was recorded at EBITDA of 9,306 Mn. and NPAT of negative Rs. 1,159 Mn. Following the application of non- recurring charges of Rs. 11.05 Bn., absolute Group NPAT is recorded at negative Rs. 12.2 Bn for FY2009.

Mr. Nushad Perera, Group Chief Marketing Officer of Dialog Telekom (right), soon after receiving the award from Mr. B. S. Shantaraju, CEO of Indus Towers (centre).

Dialog Telekom received the prestigious Frost & Sullivan Market Share Leadership Award in the Mobile Services Market category in Sri Lanka for 2009. Frost & Sullivan said Dialog Telekom has played a pivotal role in the growth of the local mobile industry by increasing the reach and affordability of these services.

Dialog Telekom Group Chief Executive, Dr. Hans Wijayasuriya, exchanges the “Star Ponts – HSBC Rewards Partnership” agreement with Mr. Nick A Nicolaou, Chief Executive Officer of HSBC Sri Lanka.

Customer-centric industry leaders global banking giant, HSBC, and Sri Lankan mobile sector leader, Dialog Telekom, announced a ground breaking partnership between their respective customer rewards schemes – Star Points and HSBC Rewards.

The partnership will permit customers of the respective organisations to enjoy an unparalleled portfolio of rewards and redemption opportunities across the Star Points and HSBC Rewards networks. Going forward Dialog and HSBC customers would be empowered to interchange loyalty points earned on either network, thereby gaining access to a wider range of redemption opportunities.

The Star Points – HSBC Rewards partnership, is one in a series of customer-centered joint initiatives extended by two companies. The partnership will enable Dialog Mobile customers to redeem Star Points across the HSBC rewards network via a conversion to HSBC Rewards points. HSBC Rewards partners include Odel, Cargills, Cinnamon Lakeside and several Airmiles Programmes such as Kris Flyer, Asia Miles and Q miles. Similarly, HSBC customers could now benefit from redemption offers from 400-plus Star Points merchants representing over 1,000 retail outlets island-wide through an interchange of HSBC rewards for Star Points.

Dr. Hans Wijayasuriya, Group Chief Executive of Dialog Telekom PLC, said, “Dialog Star Points is honoured to partner with HSBC Rewards, in presenting an unmatched and novel rewards experience to our mutual customers. HSBC and Dialog share a common vision of delivering an excellent customer experience in our respective spheres of service provision, and our unique loyalty programmes, Star Points, and HSBC Rewards reflect our shared desire to deliver a multitude of value added benefits to our customers. A coming together of these programmes will add an all new dimension to our respective rewards offerings and to the redemption and savings opportunities our customers will enjoy going forward.”

Mr. Nick Nicolaou, Chief Executive Officer of HSBC Sri Lanka and Maldives stated, “We are happy to tie up with telecom giant Dialog in a strategic alliance to offer customers more value in rewards, honoring their loyalty. This scheme will enable HSBC customers the option of redeeming their rewards points or converting them into star points and enjoy more benefits, at over 1,000 merchant outlets around the island.”

To avail of the HSBC Rewards offer, Star Points customers need to type their credit card number and the amount of Star Points to be transferred and send (SMS) it to 141. For conversions from HSBC Rewards scheme to Star Points, customers need to call the HSBC hotline on 0114 4722 77 and request for the transfer of Rewards points to Star Points.

About Dialog Telekom PLC
Dialog Telekom PLC, an ISO 9001 certified company, is a subsidiary of Axiata Group Berhad, formerly TM International Berhad. The company operates 2.5G and 3/3.5G Mobile Communications networks supporting the very latest in multimedia and mobile Internet services. Dialog Telekom PLC has the distinction of being the first 3G operator in South Asia to commence commercial operations. Its local coverage spans all provinces of Sri Lanka, while international roaming is provided in over 200 destinations. Dialog Telekom PLC, the largest and fastest growing cellular service in Sri Lanka, serves a subscriber base in excess of 6 million Sri Lankans

About HSBC
The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group which, with around 8,500 offices in 86 countries and territories and with a market capitalization of US$201bn (at 31Dec09), the HSBC Group is one of the world’s largest financial services organizations. With a tier one capital ratio of 10.3% (at 30Sep09) and a loan to deposit ratio of 79.5% (at 30Jun09), the Group remains one of the most strongly capitalised and liquid banks in the world.

Dialog Fixed-Line customers can remotely book their desired doctors by dialing 225 from their phones, and the charges for this service will comprise of the doctor’s and hospital fee and the processing fee; offering a seamless hassle-free channeling process. Customers could receive the confirmation details over the phone or via SMS as desired.

Suren Goonewardena, Chief Operating Officer of Dialog Fixed Telephony and Data Services, said: “Advancements in the mobile sphere have proffered significant benefits to user experience in the telecommunications industry, and we are happy to extend such facility to the fixed-line segment. Information Communication Technology has transformed lives and how we do business, and Dialog has put Sri Lanka at the forefront of this global transition with superior technology and customer-focused innovations.”

eChanneling is a hassle free centralised doctor booking system at private hospital chains in Sri Lanka. With this service customers can remotely book their desired doctors by simply dialing 225 from their Dialog Mobile or Fixed-Line phone.

The service is based on Dialog’s TradeNet platform - and derives on-line agri-produce price information from three Dedicated Economic Centres at Dambulla, Meegoda and Narahenpita. These three markets are just the first step in this programme, with more sites and sectors identified to be added in the future. GGS has hitherto played the lead role in collecting and disseminating spot prices of agricultural produce at the Dambulla Dedicated Economic Centre operated under the aegis of the Ministry of Trade, Marketing Development, Cooperatives and Consumer Affairs.  In partnership with Dialog’s TradeNet platform this benchmark price information will now be available to farmers scattered around the island.

Dialog Tradenet is a repository for national-level market information built on a suite of digital technologies. TradeNet encompasses the collation, comparison, qualification and subsequent dissemination of trade enablement information to large numbers of stakeholders minimising information arbitrage. The service is immediately available to Dialog’s 6 million-plus subscriber base from across all nine provinces of Sri Lanka. Affordable and inclusive access price information from all three economic centres is set to provide a robust information bridge providing parity empowerment to farmers, traders and consumers alike. Information on the TradeNet platform is disseminated via multiple digital communication technologies such as SMS, Unstructured Supplementary Service Data (USSD) via mobile phones, web and Interactive Voice Response (IVR).

GGS is a pioneering initiative under the aegis of the eSri Lanka initiative of the Government of Sri Lanka. GGS was originally funded by the ICT Agency of Sri Lanka and subsequently by private donations.  With the new partnership, Dialog Telekom will assume the primary responsibility of funding the operation with the objective of creating sustainable business models for the agricultural sector in Sri Lanka. Chronic volatility of vegetable prices due to unplanned cultivation leading to farmer poverty, demonstrated the critical importance of linking cultivation with sale, and the initiative to provide forward bids and offer prices is the first step in infusing to bridge this gap. GGS will also be supported by LIRNEasia, a regional ICT think tank and U.S. Agency for International Development (USAID) who will work towards improving data collection systems and expand the outreach to ensure that farmers receive accurate, timely and actionable price information thereby enabling them to make better decisions and build more successful agri-business operations.

Minister of Trade, Marketing Development, Cooperatives and Consumer Affairs, Bandula Gunawardena, speaking at the launch said: “it brings us a great sense of pleasure and pride to be part of this pioneering endeavour that would no doubt transform the lives and future of the country’s agriculture sector. Through the partnership between Tradenet and GGS we are in effect connecting the end consumer and the major dedicated economic centres with the farmer, and we are presenting them real-time, actual information that would serve to boost trade opportunities and remove the numerous obstacles that have continued to protract their growth. Agricultural development and farmer empowerment is an integral part of our government’s national economic agenda, and we welcome this technology innovation as a key means to achieve that end.”

Dr. Hans Wijayasuriya, Group Chief Executive of Dialog Telekom PLC, said: “we are proud to partner GGS in this initiative of significant importance to the Agriculture Sector in Sri Lanka. Dialog is committed to the overarching paradigm of positioning ICT in general, and the mobile phone in particular, as pervasive enablers of sustainable development, and economic and social expansion. We are confident that the Dialog TradeNet will deliver on these objectives and make a positive contribution to the lives of consumers and producers from across Sri Lanka.”

Dr Harsha de Silva, Founding Director of GGS, said “We have spent many years working towards this day as it has been our firm belief that eliminating poverty among agricultural households requires moving farmers from purely subsistence agriculture to some level of agri-business. The first step in this endeavour is to have efficient agricultural markets.  The research we conducted at LIRNEasia helped us in understanding how to do this by bringing in ICTs to eliminate information asymmetries and thereby reduce transaction costs along the farmer value chain.  Now this system is live, we hope to see large numbers of farmers using the actionable information to move themselves from subsistence to some form of agribusiness. Our ultimate objective is to create an inclusive yet distributed agriculture exchange that will help the millions of small farmers move out of poverty. We wish to acknowledge the support of all who have helped GGS for the last seven years and look forward to the support of others who share this vision.

Through deployment of superior voice and data transmission via world-class CDMA and WiMAX technologies, DBN will empower every connectivity need of the Mannar region, affording its residents greater coverage, unbeatable prices and a range of value-additions that would complete and enrich their communication experience.

Commenting on its latest network expansion, Mr. Kavan Ratnayaka, Chief Executive Officer of Dialog Fixed-Telephony and Broadband Services, said: “Mannar serves as an important milestone in our mission to connect the people of the liberated regions. It is the collective vision of the Dialog Group to empower people and enterprise. We envisage a digitally-enabled Sri Lanka, where every citizen can have access to the same information as their counterparts from other connected geographies. As we have demonstrated in Mannar, Dialog is indeed determined to lead this transition.”

Dialog’s network footprint in Mannar would also assist to fast-track the development efforts of the state, aiding the communication needs of both government and non-government agencies operating in the region.

Sri Lanka’s flagship mobile telecommunications service provider, Dialog Mobile, unveiled yet another ground-breaking first for its prepaid customers with ‘Dialog Discount Zones’. This is the first-ever location and time based discount scheme made available to Sri Lankan mobile users.

Dialog’s Discount Zones provide customers with ‘dynamic discounts and pricing’ based on the location of the customer and the time of day. Discount Zones will be made available to all Dialog’s prepaid customers - enabling millions of Sri Lankans to avail themselves of the spot offerings which will be created and offered to consumers on a dynamic basis.

Dialog Discount Zones will be assigned on a dynamic and random basis from across Dialog’s extensive coverage across all 25 districts of the country.  Customers within the Discount Zone at the time of offer will be notified of available offers. Dialog Discount Zones feature 50 to 70 per cent reductions on outgoing calls and SMS within the Dialog network. Attractive discounts are also on offer for IDD calls.

Dialog’s prepaid customers who enter a discount zone will receive notification of prevailing offers via a Cell Broadcast message on the mobile screen or via the Zero77Live service for which any subscriber could register at no cost.

Supun Weerasinghe, CEO of Dialog Mobile, introducing the service said: “Dialog’s Discount Zone offering is set to add an all-new dimension to the mobile usage experience enjoyed by millions of Dialog prepaid customers. Dialog customers will enjoy fantastic savings combined with the all new excitement of interactive participation in the company’s latest rewards and discounting programme which is a first in Sri Lanka’s mobile sector.”

Discounts offered to customers within a Discount Zone will be available for an hour from the time of acceptance by the customer. Rates will revert to the customer’s standard package following the expiration of this time period. The expiration of the offer will be communicated to the customer via SMS notification. Registering for this service is as simple as accepting the notification message from the recipient’s mobile phone for messages generated via Zero77 Live. In the instance a customer receives the surprise discount offer in the form of a cell broadcast message; then he or she would need to dial #677# to avail of the discount. Customers could activate Zero77 Live service by selecting Zero77 Live Activation option from the list of Dialog Services included in the SIM menu.

Reiterating its commitment to protect children from online exploitation, Dialog Broadband Networks (DBN) has introduced a new service for its subscribers titled Website Filtering. This service was launched with the objective of promoting a safer online environment for children by filtering websites that contain explicit and damaging content such as pornography, gambling, violence and drug-related material.

Commenting on its efforts for online child protection, Mr. Suren Goonewardene, Chief Operating Officer of Dialog Fixed Telephony & Broadband Services said, “Protecting children from online exploitation is of paramount importance to us as an organisation, and for the future of the nation. We will take all measures to curb every instance of children being exposed to negative online content, and we encourage parents to join hands with us to create a safe online environment for our future generations. As a responsible corporate citizen, Dialog is committed to promoting good business practice in maintaining the triple bottom line.”

The website filtering service entails no activation charges and could be subscribed on DBN’s HomeNet, HomeNet plus, OfficeNet, OfficeNet plus, SmartHome, SmartHome plus, Box Office, and Box Office plus internet packages for a monthly rental of Rs. 250.

The company’s online child protection initiative is part of a larger proposal set forth by the Government of Sri Lanka (GoSL) under the directive of His Excellency the President, Mahinda Rajapaksa. DBN’s new initiative is also in line with the International Telecommunications Union’s (ITU) global mandate of establishing the foundation for a safe and secure cyber-world for future generations, as espoused in the theme of this year’s World Telecommunication and Information Society Day- “Protecting Children in Cyberspace’. Dialog Telekom is Sri Lanka’s sole partner to the GSM Association’s Mobile Alliance Against Child Sexual Abuse, and has been actively involved in implementing this measure in association with the National Child Protection Authority.