Dialog GSM vs Airtel Battle is about to begin

b squad · Jun 27, 2008

DialogGSM, Sri lanka's #1 mobile phone network provider recently announced that they have lost Rs 500 mil. bux from their subsidiary company DialogTv. According to the CEO of DialogTv, Mr.Naushad Perera, DialogTv has won a customer base of 45,000 with-in 9 months. But still they havent make any profit out of them. Whats the reason? inefficiency? High Expenses? However Dialog share prices have gone down from Rs 26.00 to around Rs 20.00 (some says thats bcoz of the budget)

At this situation, Bharathi Airtel (India's #1) which handles 50 million mobile accounts in India, annonced that they will commence business in Sri Lanka from March 2008. It has already registered the business in Sri Lanka under the name "Airtel Lanka (Pvt) Ltd" as a BOI Project. And also They have reserved the web doamin www.airtel.com.lk under thier company. So we can expect them soon. According to the rumors, Airtel is going to slash the Sri Lankan mobile market with their cheap call charges.

As we have seen in the history, several new operators came to this industy such as HUTCH, Tigo etc but still, Dialog GSM is the number one. (Just to mention, I too use a Dialog and I'm satisfied with their service) But, Will they be able to keep their position after the arrival of India's Number one Airtel?

Comments plz...

ufirst · Jun 27, 2008

Mobitel is da Best

phantomzone · Jun 27, 2008

wel it depends machan..coz we dnt kno wat dialog gonna do wen air tel cm into action...may dialog also slash da prices....if dialog offers a better package than airtel then airtel myt struggle to survive...bt v shud note dat airtel z such a giant company in india n if im nt mistaken they hav got around 300% increase in market share in india last year only.....n dialog too z a huge com in SL....so wat im sayin z v wil definetely c a good battle between theese two companies...n itz gud..at da end of da v benifits...

n machan survival depends on dialogues future strategies....hw they r gonna respond to airtel...

yasiru1 · Jun 27, 2008

Awama balamu.mobitelda airtel da kiyala.

sallay · Jun 27, 2008

Airtell In India Was Really no.1, Yo know dat they are really innovative. They were the last to come and now no.1 in India, and hoping to capture the sri lankan market. Wat dey did is they gave 500 sms free for all packages, and outgoing toatally free for couple packages.

This is a trick in makin money. If 500 sms free, customers start sending any amount of 500 sms and after that they r so used to sending sms and which charges are low, they still continue to send. Also the couple package which totally outgoing free, , the trick is that either partner WILL make calls 2 their partner and the incoming charges will incur.

Also If Airtel comes Dialog PRICES WILL BE LOW!!!!!!!!! And it's v who Gain the benefits while all companies makes losses

According to mobile service market, it's in growing stage and still some markets are remain behind to capture for all companies, so if Airtel comes, v c wat happens!

Also wat DIALOG Differ from other operators is dat, even in most advert is clear that they show dat they hav coverage than others, it's true, but will airtel hav better coverage? look when hutch came it was cheap, but coverage was unavailable in most places

Even Tigo is facing a negative cash flow wic means no money! so they hav introduce bonus package and per second billin, but sms is just 2.55 per message with vat and calls however 4 1 mins is 7 rupees with vat. so the per second billin is that with the lowest charge the customer makes a call 4 just 10 seconds atlest, even Tigo is making money! otherwise if 7 rupees is charged customers wont make a 10 second call! and the bonus trick is that to use the bonus u hav to 1st used the credit u reloaded and then only u can use the bonus charge, so the customers tries to use the bonus and so Tigo makes money to some extent but the bonus is valid for 10 days if u reload 50 rupees.

At the end of the day all comapines are innovative and even Airtel is innovative, so according to the sri lankan market Airtel may b no.1 for mobile service ONLY not TV, Broadband, CDMA etc.... Tigo wont shift to CDMA as to the CEO's sayings od Tigo. SO LET"S C!

007-Bond · Jun 27, 2008

Mobitel is a sri lankan company (51%).
So we have to help to develop sri lankan company not Indian companys.

x-pert · Jun 27, 2008

When doing business there are 5 main pressures for any organisation mate. Competitive pressure, Power of suppliers, power of buyers, New entrants and substitute products.

So from Dialog's point of view Airtel is a new market entrant. So they should know and they should have strategies to fight with it. Eventually it will be a competitor. Then again Dialog should have strategies in place.

From Airtel's perspective I don't think they'll be able to reduce their costs that much due to the power of the suppliers. There's a limit which you can reduce the price of a product while gaining a profit!

If Airtel provides much lower costs then I'm sure Dialog will adopt to the same structure with the same infrastructure. Because if Airtel can do it, then Dialog can do it too.

Low cost strategies don't provide any sustainable competitive advantage.

And about the loss of DialogTV: Just wait and see I guess that IPTV will also face a loss in the future. Because our backbone infrastructure is not too strong and there's no way of implementing a proper fibre optic infrastructure with the current security situation in our country.

Furthermore, DialogTV has been in operaion for just 9 months. Due to the high initial investments it has to be a loss definitely. You can't expect profit within 1 or 2 years after a massive investment. Eventually they will earn profit. That's the nature of 'business'

If Airtel launches its operations in Sri Lanka, Dialog should use their 'customer loyalty' to gain the competitive advantage. That's the only viable method I can see. Or else the next one is acquiring Airtel if it becomes a bitter rival. It will cost a huge amount of money. But then Dialog can have all the profit in the long run.
But from an analyst's perspective I would like to see more and more competitors in the market which will diminish or rather reduce the monopoly!