Boston, MA -- (SBWire) -- 07/13/2013 --Compared with many of its South Asian neighbours, Sri Lanka's telecoms market is mature: penetration rates are high, 3G licences were first available in 2007 and, in late 2012, two Sri Lankan operators launched 4G LTE services. Sri Lanka is also seeking to improve speeds in the wireline market, with plans to launch a national broadband policy in a move that aims to facilitate internet access. Market development has been beset with delays, however, as the civil war prevented the development of telecoms infrastructure in affected areas in the north of the island. Since then, private and public sectors are aggressively investing in the reconstruction and expansion process.
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Key Data
- Sri Lanka's mobile industry rebounded from a disappointing 2011 to record 2mn subscriber net additions in 2012. We expect the momentum to remain relatively robust in the near future, although operators could increasingly focus on shifting subscribers to more expensive services towards the end of our forecast period.
- While we expect operators to look to leverage on consumers' comparatively high purchasing power with services such as LTE, we do not see Dialog Axiata's ARPU being able to overcome the dominance of prepaid subscriptions and competition. We envisage the operator's ARPU to reach LKR344 at end-2017.
- The fixed and mobile broadband markets are forecast to experience strong growth due to the existing low penetration rates and efforts from the government and operators to widen network coverage. We forecast 3.1mn subscribers, representing 13.9% penetration rate, by end-2017.
Key Trends And Developments
In April 2013, Dialog Axiata deployed LTE services in the capital Colombo. The 4G network will expand to other major cities and towns eventually, allowing for mobile data speed of over 50Mbps. LTE-compatible devices will benefit from the service based on the 1,800MHz FDD spectrum, which was secured from the regulator in late March 2013 for LKR3.277bn.
Hutchison Telecommunications Lanka selected the Comverse Mobile Internet Data Management and Monetization solution with the DMM Policy Studio in March 2013 to enhance its broadband capabilities in order to cater to the growing data traffic in the region. Comverse DMM Policy Studio's unique capabilities enable fast and simple creation of new data services and plans.
In early March 2013, India's Business Standard reported in early March 2013 that the Axiata group has approached Bharti Airtel to purchase the latter's operation in Sri Lanka. Axiata was reportedly interested in purchasing Tigo Sri Lanka in 2009, but Millicom International Cellular eventually sold its operation to Etisalat. Business Standard has also reported that Axiata had approached Hutchison Telecommunications Lanka, but the two companies were unable to agree on a valuation.
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Market Report, "Sri Lanka Telecommunications Report Q3 2013", Published
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