DIALOG TELEKOM POTENTIAL IN SRI LANKAN MOBILE COMMUNICATION MARKET

Dialog was the fourth entrant to the local mobile communication industry in way back in 1995. But in just 5 years of operations it becomes the market leader in the country with relating to the mobile communication industry by passing its rivals Celltel and Mobitel. An innovative company with an efficient and effective managerial leadership was the key to its success. Identifying the potential and the technological know how to come to the place they want to be. They identified the market and the changing life style patterns of the customers and created a market need to drive the market by redefining the market in some instances. As their vision envisages “To be the undisputed leader in the provision of multi-sensory connectivity resulting always, in the empowerment and enrichment of Sri Lankan lives and enterprises.” Today it enjoys of having the largest market capitalization in the Colombo stock market valued at Rs 185 billion as at 22nd May 2007 from Rs 122 billion from 31st December 2005. Becoming the first Sri Lankan company to achieve a market capitalization amounting to US $ 1.68 Billion, surpassing JKH and SLT. Dialog brand value for year 2006 is estimated at Rs 156.6 billion of enterprise value and Rs 12.3 billion from the trademark value, which is great. They achieved 1 million customer base in 2004 and just in 2 years of aggressive marketing they had achieved 3 million in 2006. Dialog is not merely a company that provides Mobile phone units or connections but it’s a company that gives a life time experience in the mobile telecommunication. It created an exponential growth to the mobile industry in the country’s development process. Dialog has taken the concept of experiential marketing to a new level to make per capita mobile penetration in Sri Lanka, the highest in the South Asian region, by touching the hearts and lives of the people.

There product category ranges from Pre-paid segment “KIT” to post paid connections (Super 100, 300, and 500 packages) Roaming, IDD, Global, Dialog Internet, Dialog GPRS/WAP/MMS, Dialog Sat, Dialog Broadband, Dialog 3G, Dialog TV, and Dialog CDMA. Up to now Dialog has the most number of value added services offered to the customers through innovations in technology with the help of R&D. Their slogan tells them of it as “The Future Today” Dialog enjoys a market share of 60% in the mobile communication in Sri Lanka where the other 40% is shared by the other 3 players in the market namely Mobitel Hutch and Tigo (former Celltel) Dialog has a customer base over 3.3 million and still growing by penetrating the market by geographically and otherwise. The mobile phone penetration in Sri Lanka is 25%, which is approximately 5 million out of a population of 20 million which puts Sri Lanka ahead of regional counterparts. An emerging market survey has found that for every $1 of GDP produced by a mobile telecommunications provider, a further $4 is added to the national GDP through consumer surplus and indirect contribution through productivity enhancement.

Dialog was one the very first enterprises that penetrated to the North & East after the CFA was signed in February 2002, taking the risk but saw the potential and the need to make need among the deprived citizens in the North & East. Internet penetration level in Sri Lanka is 13%which is an extremely dismal compared to other countries in the region. This gap could bridge the “rich and poor gaps” as well as geographical gaps and how a higher level of internet penetration could be achieved. “Sirisena in the village needs to believe that by having a computer in his house, his child is closer to becoming equal with a youngster in Colombo. The day he believes that, Internet penetration would take off.” Dialog’s success had been due to the fact that it has recognized that the “wealth is at the bottom of the pyramid”.

Dialog Telekom becomes part of the world largest mobile community after signing a milestone agreement with Britain’s Vodafone. This move will enhance the company’s capabilities in delivering world class mobile communication solutions to its customers using the cutting edge technology. With the innovation of the star call became the country’s first voice SMS service, while the Blackberry platform was launched revolutionizing mobile information management in the corporate sector in Sri Lanka. With the launch of Dialog 3G services in the country, consumers have the opportunity that include Video Calls, IDD Video Calls, TV on the phone, high speed internet, Video Streaming, Music and Movie downloads and Online games. During the next few years Sri Lanka will experience a change in the life style and the way “we-people” do business as convergence of media space, high speed mobile connectivity…. this would spell out an exciting era ahead for Sri Lankan consumers. The future in business is the development of collaborative commerce where one would tie up with many third parties to provide more value added service for the benefit of the customers which the company caters to. The other thing is where the companies merge and acquire such as where dialog acquired MTT Networks (Pvt) Ltd for Dialog Broadband, acquiring of Asset Media, a company licensed to operate television Broadcasting and pay television services in Sri Lanka. And subsequently Dialog Telekom subsidiary Asset Media, acquires Communiq Broadband Networks (Pvt) Ltd and CBN Sat (Pvt) Ltd, a Direct-to-Home Satellite TV service providing a head start to the company’s media business. Also in line up is acquiring of CDMA providers such as where Dialog has bid to purchase Suntel. This enables the way for Dialog to provide quadruple (Mobile, Fixed, Broadband, and Television Media) product proposition for Sri Lankan consumers.

As the market leader, they seems to be implementing the correct strategies… they should grow the market by targeting new users by penetrating the market, develop new segments and to increase the usage. And they need to defend the market by innovating new products and service developments by carrying out R&D, developing new processors and systems. By using the marketing mix, by mergers and acquisitions they could expand their market share. They seem to be using military strategies well and correctly as they adopt position defense, mobile defense, Flanking defense and also pro-active defense strategies in order to defense it self as market leaders.
Dialog has segmented the market across its boundaries by means of geographically, demographically, psychologically and behavioral with products and services which caters to that particular segment, by understanding the customers needs. There is a growth in mobile communications and Mobile – Commerce which has tremendous potential for Dialog to capitalize on the opportunities that lies ahead of them. One of the mobile marketing capabilities it could develop is the location based advertising with the concept of consent based advertising which will be highly effective means of reaching the target market. Another way is to develop the mobile commerce where the credit card may be the substitute for the mobile device. Where in turn the cost of the purchased product or service could be debited to the mobile account. E.g. when a person purchase goods worth of Rs 12,000 that amount could be debited to the mobile account like when an appointment is made for a doctor through e-channeling and billed to the mobile bill. The future could be seen more advanced than this as today’s youth and the young executives listen and download many songs though their mobile devices with the help of the 3G technology and so forth. For e.g. downloading of music, ring tones, chat and even to purchase various products and services using the mobile device.

Dialog is a company that engages in many CSR projects. For the year 2006 they have engaged in 14 projects running into millions of rupees. They have engaged in relating to Youth & Education, Humanitarian, empowering the differently abled and in Digital inclusion spheres. One of the impressive projects was the Change Trust Fund embarked in 1999; Dialog Scholar initiative Dialog has also won numerous International awards in recognition of the many initiatives taken. World GSM awards 2001-2003, National Business Excellence awards 2004-2005, International Asia Pacific Quality Award 2002, ISO 9001:2000 Quality Management System Recertification 2006, The National Awards for Science and Technology 2006, GSM Asia Mobile Innovation Awards –DEWN (2006), and many more where Dialog tops as the most valuable brand in Sri Lanka. Whilst Airtel has been given licenses to operate in the local mobile market, we are yet to see how Airtel will launch its services based on what strategy whether at skimming strategy or by pricing strategy? As Airtel is the leading mobile operator in India they will have to give a good competition to Dialog if they hope to compete with Dialog. There is a question to ask, is there a need for a fifth Operator in Sri Lanka as the population is only 20 million and the total mobile market is around 12-15 million (comprising of the total working force and the dependents as children, where the bills are paid by their parents and also not forgetting the older generation where there is an increase due to increase in the life expectancy.) Dialog seems to be getting ready to combat with the Airtel from now onwards. While Dialog is a Malaysian company 87% owned by Telekom Malaysia, and the rest 13% is owned by the public and the corporate here and abroad. I hope very soon it will be a truly Sri Lankan company and teaching world mobile operators how to do business with relating to Mobile communications. Recently Dialog announced a rights issue to where they raised additional capital of Rs 15.5 billion in order to expand and their horizons and to carry out R&D implement the very latest technologies in the mobile industry benchmarking with British Telokom and NTT of Japan.