2011 Sri Lanka - Telecoms, Mobile, Broadband and Forecasts

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Last updated: 24 Feb 2012 Update History

Report Status: Archived

Report Pages: 83

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.

Researcher:- Peter Evans
Current publication date:- February 2012 (17th Edition)

Executive Summary

After years of war, peace sees Sri Lanka’s big push for a connected, online society

With the end of the civil war in 2009 has come the hope of an enduring peace for Sri Lanka. By 2011 there was already evidence of a general improvement in the country’s social and economic well-being. This improving market environment finds the 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 fits well with the government’s clear 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 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 any country’s telecom sector is necessary to provide, among other things, an impetus for national economic activity. Sri Lanka had a modest GDP per capita of just under US$3,000 by 2011. Despite its somewhat low economic ranking, the country 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 18% by 2011. In 2006 teledensity stood at a relatively meagre figure of less than 6%. By 2008 it had reached 3.5million (17%). 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 with this technology making up 74% of all fixed services in operation. There is a large concentration of fixed services in the capital Colombo which has a penetration of 35%. The considerably lower fixed penetration levels outside the capital 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 continued on a strong 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.

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 – Dialog Axiata, Mobitel, Etisalat Sri Lanka and Hutchison Lanka – were joined by a fifth operator, Bharti Airtel Lanka, in 2009; the newest player launched itself vigorously into the marketplace adding to the already high level of competition.

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 just 10% coming into 2011. Despite signs of an enthusiastic user market, coverage and accessibility remain limited and the sophistication of the available services generally low. By early 2011, there were only around 220,000 fixed broadband internet subscribers in this country of 20 million people, representing a broadband penetration of just over 1%. 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 18 million subscribers by mid-2011, for a mobile penetration of 87%.
  • 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.
  • The country’s fixed-line market had been undergoing a period of healthy growth, reaching a subscriber penetration of close to 18% by 2011, but growth had levelled out.
  • Fixed-line expansion has been boosted by the extensive application of CDMA-based WLL technology; WLL services comprised almost three quarters of the total fixed line subscriber base by 2011.
  • 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 only around 1% in 2011.
  • The government having established the National Broadband Consultative Committee (NBCC) in 2010, there was little evidence of it having any great impact into 2011.

Sri Lanka - key telecom parameters – 2010 - 2011

Category

2010

2011 (e)

Fixed-line services:

 

 

  • Total number of subscribers

3.58 million

3.70 million

  • Annual growth

4%

3%

  • Fixed-line penetration (population)

17%

18%

Internet:

 

 

  • Total number of subscribers

300,000

400,000

  • Annual growth

20%

33%

  • Internet subscriber penetration (population)

1.4%

1.9%

Mobile services:

 

 

  • Total number of subscribers

17.3 million

19.8 million

  • Annual growth

23%

14%

  • Mobile penetration (population)

82%

92%

(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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