Publication Overview
This report provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Sri Lanka. Subjects covered include:
- Key Statistics;
- Market and Industry Overviews;
- Regulatory Environment;
- Major Players (fixed and mobile);
- Infrastructure;
- Mobile Voice and Data Market;
- Internet, including VoIP;
- Broadband.
Researcher:- Peter Evans
Current publication date:- December 2012 (18th Edition)
Executive Summary
Sri Lanka’s continues its post-conflict recovery, pushing towards a connected, online society
With the end of the civil war in 2009 Sri Lanka entered what is referred to as a ‘post-conflict’ phase. By 2012 there were positive signs of a general improvement in the country’s social and economic well-being. And the telecom sector in particular is starting to build a fresh momentum.
In May 2010 President Rajapaksa appointed the Lessons Learnt and Reconciliation Commission (LLRC) in 2010, a commission designed to help prevent a recurrence of conflict and to look at restitution. The final LLRC report was tabled in Sri Lanka’s Parliament in December 2011. It recommended ways of advancing reconciliation and reconstruction, including a reduction in the presence of security forces in the north, care of internally displaced persons and enhanced media freedoms. The government also implemented a National Human Rights Action Plan (NHRAP). In March 2012, however, the UN Human Rights Council adopted a resolution calling on Sri Lanka to address alleged violations of international law, to implement the LLRC report’s constructive recommendations, and to present a comprehensive action plan on implementing the recommendations. The Sri Lankan Government released a National Action Plan to implement the recommendations of the LLRC report in July 2012 and has proceeded to implement this plan.
In the meantime, over the past few years the Sri Lankan economy has rebounded from the difficult state it was experiencing in 2009. The country had been hit by a balance of payments crisis in that year and needed a US$2.6 billion IMF loan to bail it out. Since then, however, the US$59 billion economy has been reporting strong economic growth - over 8% in 2011 - and the unemployment rate had hit a record low. The IMF has forecast growth of close to 7% over the 2012/2013 period.
The generally improving market environment has seen the country’s telecom sector well positioned for continuing vigorous growth. The already modern and progressive telecommunications sector is certainly high on the list of priorities for further expansion and development. This also fits well with the government’s wider agenda for national development.
A good start has been made on expansion and provision of infrastructure that is capable of providing a sophisticated level of telecommunications service to the population throughout the whole country. Extending infrastructure into the North and Eastern provinces, those parts of the country most affected by the long-running war is being given high priority. It is well recognised that the growth and development of any country’s telecom sector is necessary to provide, among other things, an impetus for national economic activity. Nevertheless, much still needs to be done to complete the build-out of the necessary national infrastructure.
Fixed-line teledensity was a healthy 17% by 2012. In 2006 teledensity stood at a relatively meagre figure of less than 6%. It had reached 3.5million (17%) by 2008. Since then growth has flattened out. A recent small boost to the numbers was aided by the widespread application of the Wireless Local Loop (WLL) platform. There is a large concentration of fixed services in the capital Colombo which has a penetration of 35%.
In the meantime, the country’s mobile telephone services have continued on a positive growth path. As an effective and efficient alternative to the fixed-line networks, with their earlier problems in meeting the demand for telephone services, the mobile phone quickly became a popular and essential service. The Sri Lankan mobile market was still growing at an annual rate of around 50% in 2009 in as it headed towards the 60% penetration mark. However, since then subscriber growth has moderated to less than 10% per annum. The country’s four competing mobile operators – Dialog Axiata, Mobitel, Etisalat Sri Lanka and Hutchison Lanka – have been joined by a fifth operator, Bharti Airtel Lanka, adding vigour to an already highly competitive market.
The development of the internet remains of particular concern for Sri Lanka. In a country whose population is increasingly undeniably internet savvy and the government rhetoric positively supports the nation going online, the estimated user penetration stood at 15% coming into 2012. Despite signs of an enthusiastic user market, coverage and accessibility have continued to be limited and the sophistication of the available services generally low. The level of broadband access has been of particular concern. By early 2012, however, fixed broadband internet services in this country were being supplemented by a rapidly expanding mobile broadband segment, delivering an overall broadband penetration of over 4%. A promising sign on the way to wider adoption of the internet was the creation by the government in 2010 of the National Broadband Consultative Committee (NBCC).
Market highlights:
- Sri Lanka’s mobile market had reached over 19 million subscribers by mid-2012, for a mobile penetration of 91%.
- This meant that the number of mobile subscribers had increased eightfold in just six years.
- The leading mobile operators have commenced trials of Fourth Generation (4G) technologies with a view to launching by end-2012.
- The country’s fixed-line market underwent a sustained period of healthy growth, reaching a subscriber penetration of 17% by 2012, but growth has levelled out in the last few years.
- Fixed-line expansion has been boosted by the extensive application of CDMA-based WLL technology; WLL services comprised around three quarters of the total fixed line subscriber base by 2012.
- The country’s internet sector remained underdeveloped, with the take up rate of broadband services being especially low; there were however signs that this was starting to change, especially with the surge in mobile broadband services.
- Fixed broadband penetration (as a percentage of population) was still less than 2% in early 2012.
- The government having established the National Broadband Consultative Committee (NBCC) in 2010, there was little evidence of it having any great impact to date.
Sri Lanka - key telecom parameters – 2011 - 2012
|
Category
|
2011
|
2012 (e)
|
|
Fixed-line services:
|
|
|
|
Total number of subscribers
|
3.61 million
|
3.60 million
|
|
Internet:
|
|
|
|
Total number of subscribers (fixed)
|
509,000
|
600,000
|
|
Mobile services:
|
|
|
|
Total number of subscribers
|
18.3 million
|
20.0 million
|
(Source: BuddeComm)
