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:- January 2011 (16th Edition)
Next publication date:- November 2011
Executive Summary
Sri Lanka sets out on recovery path after years of war: big national push towards a connected, online society
Sri Lanka appears to have embraced a new energy and focus following the end of long-running civil war that came with the defeat of the Tamil Tigers in 2009. The already modern progressive telecommunications sector is certainly high on the list of priorities for further expansion and development. This fits well the national agenda to work at strengthening the economy and general well-being of the country.
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 country. Nevertheless, much still needs to be done to complete the build-out of the necessary national infrastructure. 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 the telecom sector is necessary to provide, among other things, an impetus for national economic activity. Sri Lanka is characterised by high levels of literacy (93%), life expectancy (74 years) and infant mortality that are comparable to those of developed countries. The country is also working towards increasing the availability and speed of Internet access, in order to support e-commerce and other services that play an important role in global commercial activity.
Fixed-line teledensity had reached a healthy 17% by 2010. In 2006 teledensity stood at a comparatively meagre figure of less than 6%. But within 24 months, by early 2008, the number of fixed lines had more than doubled to around 2.7million (or a penetration of around 13%). By end-2008 it was estimated to have reached 3.5million (17%). But since then growth has flattened out. The recent boost to the numbers was aided by the widespread application of the Wireless Local Loop (WLL) platform to support the fixed-line rollout.
Fixed-voice penetration still needs to be increased, however, especially when it is recognised that there is a large concentration of these services in the capital Colombo with a penetration of 35%. The lower penetration levels outside the capital have continued to be more a result of acute supply constraints rather than a lack of demand for services. Sri Lanka’s below average teledensity compared with countries with comparable per capita GDP was seen as an indication of the growth prospects in the industry. Historically, the country has experienced periods of slowing capital investment as its war-battered economy attempted to regain momentum.
In the meantime, the country’s mobile telephone services has continued on a strong growth path. By offering an effective and efficient alternative to the fixed-line networks, with their chronic problems in meeting the general demand for telephone services, the mobile phone quickly became an essential service. By early 2009, the Sri Lankan mobile market was still growing at an annual rate of almost 40% as it passed the 60% penetration mark. However over the 2009/2010 period subscriber growth had moderated to 20%-30%. A positive growth pattern looked set to continue as the country’s four competing mobile operators – Mobitel, Tigo (Celltel Lanka), Hutchison Lanka and Dialog Telekom (MTN) – battled for market share and position. These four had been joined by a fifth operator in 2009, when Bharti Airtel Lanka launched its GSM service, adding to the competition in the marketplace.
The development of the Internet remains of particular concern for Sri Lanka. In a country whose population is increasingly Internet savvy, the estimated user penetration stood at around 9% by late 2010. Despite signs of an enthusiastic user market, coverage and accessibility remained limited and the sophistication of the available services generally remained low. By mid-2010, it was estimated that there were only around 200,000 broadband Internet subscribers in this country of 20 million people. A promising step towards wider adoption of the Internet was the creation by the government in March 2010 of the National Broadband Consultative Committee (NBCC).
Market highlights:
- Sri Lanka’s mobile market had reached over 16 million subscribers by late 2010, for a mobile penetration of around 70%.
- This meant that the number of mobile subscribers had increased tenfold in just six years.
- A fifth mobile operator, Bharti Airtel Lanka, had launched its network/service in 2009 and this was further increasing the level of competition in the market.
- The country’s fixed-line market had been undergoing a period of healthy growth, reaching a subscriber penetration of 17% by 2010, but growth was levelling out.
- Fixed-line expansion has been boosted by the extensive application of CDMA-based WLL technology; WLL services comprised slightly more than 70% of the total fixed line subscriber base by 2010.
- 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.
- Fixed broadband penetration (as a percentage of population) was still below 2% in 2010.
- In March 2010 the government established the National Broadband Consultative Committee (NBCC).
Sri Lanka - key telecom parameters – 2009 - 2010
|
Category
|
2009
|
2010 (e)
|
|
Fixed-line services:
|
|
|
|
Total number of subscribers
|
3.44 million
|
3.65 million
|
|
Annual growth
|
0%
|
6%
|
|
Fixed-line penetration (population)
|
17%
|
17%
|
|
Internet:
|
|
|
|
Total number of subscribers
|
250,000
|
275,000
|
|
Annual growth
|
1%
|
10%
|
|
Internet subscriber penetration (population)
|
1.3%
|
1.4%
|
|
Mobile services:
|
|
|
|
Total number of subscribers
|
14.1 million
|
17.0 million
|
|
Annual growth
|
27%
|
21%
|
|
Mobile penetration (population)
|
70%
|
83%
|
(Source: BuddeComm)
Data in this report is the latest available at the time of preparation and may not be for the current year.
