Dialog Axiata has reported strong financial and operational growth for the first half of 2026, with Group revenue rising 9% year on year to Rs 95.5 billion as investments in 5G, broadband and digital financial services strengthen its position in Sri Lanka’s digital economy.
For the quarter ended 30 June 2026, Group revenue reached Rs 48.2 billion, up 2% quarter on quarter, supported by higher data revenue and growth in Home Broadband. The stronger top-line performance was accompanied by significant improvements in profitability, with Group EBITDA rising 23% year on year to Rs 50 billion for the first half.
EBITDA margin expanded by 6 percentage points to 52.3%, while second-quarter EBITDA increased 6% quarter on quarter to Rs 25.7 billion.
Group net profit after tax reached Rs 19.3 billion for the first half, more than doubling year on year. Dialog attributed the increase to stronger EBITDA, lower net finance costs and foreign exchange gains, including gains associated with forward contracts against future US dollar-denominated liabilities.
Excluding foreign exchange gains, underlying NPAT for Q2 stood at Rs 9.6 billion, up 76% year on year and 4% quarter on quarter. Underlying NPAT for the first half reached Rs 18.8 billion, representing 91% year-on-year growth.
5G investment expands as data demand grows
A significant part of Dialog Axiata’s investment strategy is focused on next-generation connectivity.
The Group invested Rs 18.5 billion in capital expenditure during the first half, equivalent to 19% of revenue. Much of this investment was directed towards accelerating its 5G network rollout, which has now expanded to more than 1,000 live sites.
The investment is intended to increase access to advanced mobile technologies while giving Dialog greater capacity to accommodate rising data consumption.
The operator is also using its 5G infrastructure to expand beyond conventional mobile connectivity.
During the quarter, Dialog launched Dialog Air Fibre, described by the company as Sri Lanka’s first 5G-powered ultra-fast Wi-Fi solution. The service uses the existing 5G network to provide high-speed, low-latency connectivity without requiring fixed-line infrastructure.
The approach gives Dialog another route into the broadband market, particularly where extending traditional fixed infrastructure may be less practical. It also expands the potential addressable market for 5G beyond smartphone connectivity.
Dialog’s broadband business is already contributing to growth. Dialog Broadband Networks, which includes fixed telecommunications, broadband and international businesses, generated Rs 17.9 billion in revenue during the first half, up 3% year on year.
Digital services become a larger part of the business
Dialog’s results also point to a broader shift from telecommunications towards digital services.
The company launched Dialog Pay, an integrated platform within the MyDialog App that combines connectivity, payments and financial services.
The service is aligned with Sri Lanka’s LankaQR Payment Promotion Programme and is intended to encourage greater adoption of digital payments while extending financial services through Dialog’s existing digital ecosystem.
The move gives Dialog an opportunity to use its large customer and digital platform base to participate in areas beyond traditional connectivity. It also reflects the growing convergence between telecommunications, payments and digital financial services.
For telecom operators, these services can create additional digital touchpoints with customers while making existing apps more central to everyday transactions.
Dialog Television and broadband deliver strong growth
Dialog’s other businesses also contributed to the group’s performance.
Dialog Television maintained its leadership in Sri Lanka’s pay-TV market with more than 1.6 million subscribers at the end of June 2026. Revenue increased 17% year on year to Rs 7.5 billion during the first half, driven by higher advertising revenue.
The stronger revenue performance translated into a 54% increase in EBITDA to Rs 1.8 billion. Dialog Television recorded NPAT of Rs 0.4 billion for the period.
Dialog Broadband Networks recorded EBITDA of Rs 10.8 billion, up 12% year on year, while its EBITDA margin reached 60%, an improvement of 5 percentage points. NPAT increased 41% to Rs 4.1 billion.
The growth came despite a substantial reduction in revenue from the lower-margin international hubbing business, with broadband and data revenue providing the main growth drivers.
At the parent company level, Dialog Axiata PLC generated Rs 73.3 billion in revenue during the first half, up 11% year on year. EBITDA increased 27% to Rs 37.3 billion, while NPAT exceeded Rs 15.8 billion.
Strong cash generation supports investment
Dialog’s financial performance is also providing room for continued infrastructure investment.
The Group generated operating free cash flow of Rs 18.4 billion during the first half. At the same time, the Board approved a second interim dividend of Rs 0.70 per share for FY2026, taking total year-to-date dividends to Rs 1.40 per share.
The company said the annualised dividend yield stood at 6.1% based on its closing share price for Q2 2026.
The balance between shareholder distributions and high capital expenditure indicates that Dialog is attempting to maintain investment in its network while continuing to provide returns to shareholders.
Dialog remains a major contributor to Sri Lanka’s economy
Beyond its commercial performance, the Group reported a substantial contribution to government revenues.
Dialog remitted Rs 30.9 billion to the Government of Sri Lanka during the first half of 2026. This consisted of Rs 8.1 billion in direct taxes and levies and Rs 22.8 billion in indirect taxes collected on behalf of the government.
Total taxes paid increased 9% year on year, with direct taxes rising 14% and indirect taxes increasing 7%.
The company’s financial results therefore reflect not only stronger operating performance but also the growing economic role of telecommunications and digital services in Sri Lanka.
Why this matters
Dialog Axiata’s latest results show how Sri Lanka’s telecom market is evolving beyond traditional mobile connectivity.
The company is simultaneously expanding 5G infrastructure, growing broadband access through a 5G-based alternative to fixed connectivity, and moving into digital payments through Dialog Pay. These initiatives position the operator to participate in several parts of the country’s expanding digital economy rather than relying solely on mobile voice and data revenues.
The more than 1,000 live 5G sites are particularly significant because network investment is increasingly becoming a foundation for new services rather than simply a capacity upgrade. Air Fibre demonstrates how the same infrastructure can support additional broadband propositions, while Dialog Pay illustrates how telecom customer relationships can extend into financial services.
The challenge will be converting this infrastructure and platform expansion into sustained customer adoption and recurring digital revenue. Strong financial performance gives Dialog greater capacity to continue making those investments.
Editor's note
The most interesting development in Dialog Axiata’s results is not simply the scale of its 5G rollout. It is the increasingly blurred boundary between telecoms, broadband and financial services.
Dialog is building a digital ecosystem around its network, customer base and MyDialog platform. If Air Fibre and Dialog Pay gain significant adoption, the company could increasingly operate as a broader digital services provider rather than a conventional telecom operator. The financial results suggest that this transition is already becoming an important part of its growth strategy.
