Dialog Axiata swung to a 531 million Sri Lankan rupee ($4.2 million) loss for its first quarter, blaming forex losses and costs accrued from a $34 million acquisition.
The Sri Lankan incumbent operator had reported a 1 billion rupee profit during the same quarter a year earlier.
But a 2.1 billion rupee non-cash foreign exchange loss for 1Q12 - and acquisition expenses related to the group's acquisition of fixed wireless operator Suntel in a deal which closed in March - pulled the operator into the red.
Adjusted for these costs, Dialog Axiata said normalized group profit grew 85% year-on-year.
Revenue increased 18% year-on-year to 12.9 billion rupees, led partly by growth in the company's mobile and international segments.
The company maintained its market lead in Sri Lanka's mobile sector, with its total mobile customer base growing to 7.4 million by the end of the year.
Fixed-line unit Dialog Broadband Networks grew revenue 4% year-on-year to 609 million rupees. While the subsidiary reported a 147 million loss for the quarter, this was a 25% improvement on 1Q11.
Dialog Television grew revenue 22% for the quarter, and reported a profit for the period of 37 million rupees.
The group allocated 1.7 billion rupees for capex during the quarter.
Dialog Axiata said the bulk of this spending went towards high-speed broadband and fiber deployments, as well as expanding the company's mobile networks to accommodate increased voice and wireless data demand.