Just Inquiring

August 31, 2006 (LBO) – Sri Lanka Telecom is in talks to acquire a small software company to beef up its technical capacity and expand revenue streams. The island's biggest fixed line operator plans to do a due diligence on eServices Lanka Ltd, SLT chief executive Shuhei Anan said Thursday.

eServices Lanka Ltd is jointly owned by the Sri Lankan government, the Maharaja Group and BC Computers. The software firm is currently in charge of automating the country's customs department.

SLT expects the due diligence exercise to take about three months, after which it will decide on whether to buy the entire company or part of it.

Japan's Nippon Telegraph & Telephone Corp. (NTT) controls 35.2 percent of SLT, the Sri Lankan government owns 49.5 percent and the public 15.3 percent.

SLT posted a 67 percent year-on-year growth in net profits of 2.30 billion rupees for the six months to June, driven by higher sales of CDMA or wireless phones and data services. The telco, which controls 85 percent of the island's fixed line market, hopes to increase its CDMA subscriber base to 250,000 from the current 170,000 customers.

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