|
|  |
| Dialog II |
|
| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25747 |
| Company name | Telekom Malaysia |
| Country | Sri Lanka |
| Sector | Information |
| Environmental category | C |
| Department | Global Inform. & Comm. Tech. |
| Status | Completed |
|
| Date SPI disclosed | June 25, 2007 |
| Projected board date | July 26, 2007 |
| Previous Events | Invested: September 28, 2007
Signed: September 21, 2007
Approved: August 2, 2007 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The $676 million project consists of the nationwide expansion and upgrade of Dialog Telekom’s (Dialog or the company) GSM network in Sri Lanka as well as expansion of its business into broadband and pay TV services. Dialog Telekom is currently majority owned by TM International Sdn. Bhd. TM International Sdn. Bhd is a fully owned subsidiary of Telekom Malaysia Berhad (TM or the sponsor), which is the ultimate parent company of Dialog Telekom. In September 1993, Dialog was awarded a 20-year license to provide cellular telecommunications services as the result of a standard transparent application and award process by the Government of Sri Lanka (GoSL). |
|
| Project sponsor and major shareholders of project company |
| Telekom Malaysia (TM) is the leading telecommunications company in Malaysia, providing voice and data services through its fixed-line, mobile, and Internet subsidiaries. TM is listed on the Kuala Lumpur Stock Exchange. TM has extensive experience in building and operating mobile networks in developing countries with operations in Sri Lanka, Bangladesh, Pakistan, India, Indonesia, Singapore, Cambodia, Thailand, Malawi, Guinea, and Iran. Together, its operations have more than 34 million subscribers. |
| Total project cost and amount and nature of IFC's investment |
| Total project cost is estimated to be $676 million and covers the expansion of the mobile telephony business, and the entry into the Pay TV, broadband, fixed wireless markets. IFC’s investment for its own account would be up to $100 million. Equity contributions from the shareholders, an ECA guaranteed international loan facility and local finance would provide the balance of the required funding. |
| Location of project and description of site |
| Dialog Telekom is headquartered in Colombo, Sri Lanka. The company’s GSM network covers most of the territory of Sri Lanka. |
|
| Anticipated development impact of the project |
The telecommunications market in Sri Lanka has been growing in recent years, but the country still has a relatively low combined mobile and fixed penetration rate of about 35%. The project will have significant development impact by modernizing and expanding the telecommunications services in Sri Lanka.
The project is expected to have the following specific development impacts:
- Achieve 100% population coverage by 2008 (current level of population coverage is 90%);
- Promote the economic development of the poorest and most remote areas of Sri Lanka, which currently have poor connectivity;
- Maintain the existing subscriber acquisition momentum;
- Expand broadband penetration which is now less than 1%;
- Offer satellite TV service to 100% of the population, bringing news and information to areas previously without any TV service. |
| IFC's expected development contribution |
| Dialog is undertaking one of the largest and most ambitious projects in Sri Lanka. IFC will provide long-term funding of up to 8 years in a politically uncertain environment where substantial long-term funding from local or international commercial banks is limited. Furthermore, the project would support South-South investments by assisting a Malaysian-based sponsor support its activities in surrounding frontier countries. |
| Environmental and social issues - Category C |
| This is a Category C project according to IFC’s environment and social review procedure. The company will ensure that all operations comply with applicable IFC environmental and social policies and guidelines and with the environmental, health and safety laws of Sri Lanka. In addition, the company will provide IFC with an annual environmental and social monitoring report. |
|
| For inquiries about the project, contact: |
Mr. Munesh David, Manager – Corporate Finance
Dialog Telekom Ltd.
No. 475 Union Place, Colombo 02, Sri Lanka
Telephone: 94-11-267-8700
Fax: 94-11-266-9704 |
|
| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
|
|
|
|