TM plans to boost network and subscriber base of Sri Lankan unit

TELEKOM Malaysia Bhd, which plans to sell 9.6% stake in Sri Lankan mobile-phone unit MTN Networks Pvt, will use the proceeds to expand MTN's network and boost subscriber base by one-third to two million this year. 

Telekom has invested US$200mil in Sri Lanka since 1994 and wants to expand through MTN, the country's biggest cell-phone operator with 1.5 million users.  

“We will use the funds to invest in increasing capacity and getting into the rural areas, especially the northeast, where we see high growth,'' chairman Tan Sri Md Radzi Mansor said in an interview in Co-lombo, the Sri Lankan capital, late yesterday. 

“We will also take some of the funds raised back into Telekom,'' he added. 

MTN expanded its coverage into Jaffna, in the northern part of Sri Lanka, 90 days after the Sri Lankan government agreed to a cease-fire with the northern-based rebels in a 20-year civil war that had killed 60,000 people and devastated the US$18bil economy.  

The sale's arranger, NDB Investment Bank, said last month that Telekom Malaysia might raise 4 billion rupees (US$40mil) selling shares in MTN, making it the island's biggest-ever initial public offering. 

The share sale would probably receive more bids than shares offered, said Channa Amaratunga, vice-president of asset management at Asia Securities in Colombo.  

“Investors are looking forward to this issue because it's a strong brand and a well-run company,” Amaratunga said in a phone interview on Thursday.  

“We will start to see investors selling off in the stock market in preparation, once the date of the share sale is announced.'' – Bloomberg  

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