2009 Sri Lanka - Telecoms, Mobile, Broadband and Forecasts

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Last updated: 25 Nov 2009 Update History

Report Status: Archived

Report Pages: 80

Analyst: Peter Evans

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;

·         Telecom market forecasts for selective years to 2018.

 

Researcher:- Peter Evans

Current publication date:- November 2009 (15th Edition)

Next publication date:- December 2010

Executive Summary

A modern progressive telecommunications sector is certainly high on the list of priorities for Sri Lanka. There is considerable determination within the country 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 civil war that ended in May 2009, has been of 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 needs the ready availability of Internet, email, e-finance, e-commerce and other services that play an important role in global commercial activity.

 

At the end of 2008 fixed-line teledensity reached 3.5 million (17%). The boost to the numbers was aided by the widespread application of the Wireless Local Loop platform to support the fixed-line roll-out. The fixed voice penetration levels remained relatively low 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 low penetration levels have continued to be more a result of acute supply constraints rather than a lack of demand for services.

 

In the meantime, the country’s mobile telephone services have been booming. 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 has become an essential service and is no longer considered a substitute for a fixed-line 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. The strong growth looked likely 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 January 2009, when Bharti Airtel Lanka launched its GSM service.

 

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 5% in early 2009. Despite signs of an enthusiastic user market, however, coverage and accessibility remained limited and the sophistication of the available services generally remained low. By end-2008, it was estimated that there were only around 100,000 broadband Internet subscribers in this country of 20 million people.

 

Key highlights:

·         Sri Lanka’s mobile market had reached 12 million subscribers by March 2009, for a mobile penetration of just over 60%.

·         In other words, coming into 2009, the number of mobile subscriber had increased tenfold in just over five years.

·         With three mobile operators having launched their 3G services, there were around 400,000 3G subscribers in Sri Lanka by early 2009.

·         A fifth mobile operator, Bharti Airtel Lanka, launched its network/service in January 2009, 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% in 2008.

·         Fixed-line expansion had been boosted by the extensive application of CDMA-based WLL technology; WLL services comprised 70% of the total fixed line subscriber base by end-2008.

·         After a number of years of solid expansion, there were signs that the fixed line growth was slowing in early 2009.

·         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 changing.

 

Sri Lanka – key telecom parameters – 2008 - 2009

Category

2008

2009 (e)

Fixed-line services:

 

 

·         Total number of subscribers (million)

3.45

3.50

·         Annual change

26%

1%

·         Fixed-line penetration (population)

17%

17%

Internet:

 

 

·         Total number of subscribers

234,000

260,000

·         Annual change

16%

11%

·         Internet subscriber penetration (population)

1.2%

1.3%

Mobile services:

 

 

·         Total number of subscribers (million)

11.1

14.5

·         Annual change

42%

30%

·         Mobile penetration (population)

55%

71%

(Source: BuddeComm)

 

Data in this report is the latest available at the time of preparation and may not be for the current year.

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