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Sri Lanka Telecommunications Report Q3 2012 - New Market Report Now Available

New Fixed Networks market report from Business Monitor International: "Sri Lanka Telecommunications Report Q3 2012"


Boston, MA -- (SBWIRE) -- 08/02/2012 -- Regulatory data show that the Sri Lankan mobile market grew by approximately 6.1% during 2011, ending the year with 18.319mn subscribers. This was less than had been hoped for and appears to be due to a significant scaling down of the customer base reported by Airtel Srilanka, nominal growth at Etisalat Lanka and a possible reduction of the customer base reported by Hutchison Lanka. Although there seems to be a stronger push from the leading operators for postpaid and value-added services, the high cost of these offerings relative to the low-cost voice and SMS services, most Sri Lankans seem to favour, means that growing these new revenue streams will be difficult at best.

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With mobile market leader Dialog Axiata having stopped providing ARPU breakdowns in Q211, it is difficult to plot the trajectory of advanced mobile services in the country. However, new data from the regulator tracking the growth of mobile internet subscribers, suggests that some of the country's more affluent consumers are seeing the benefit of non-voice data services, a trend that Hutchison Lanka may be responding to now that it has finally decided to launch its 3G service, six years after receiving its licence to do so.

The regulator believes there were 485,000 mobile internet subscribers in the country at the end of 2011, up by 142.5% y-o-y. However, with internet-capable 2.5G systems based on EDGE and GPRS technologies in widespread use, it seems unlikely that 3G has reached a tipping point just yet. We have, however, slightly increased our 3G subscriber forecast and envisage customer numbers reaching 350,000 by the end of 2012 and 1.077mn by 2016. By the end of the forecast period, 3G will account for 5.2% of a total mobile market of 20.615mn mobile subscribers.

Hutchison's push into 3G may also have been prompted by the 35% increase in its customer base in 2011, following on from a 76% increase in 2010. However, the operator is careful not to disclose actual subscriber numbers and BMI increasingly believes that around 400,000 of the 1.855mn customers thought to be registered with the company were actually inactive. Hutchison often includes inactive accounts in the customer bases it reports for its other operations around the world, so we have taken the decision to award it a lower user base in the quarter's update, which also drags on the market forecast and Sri Lanka's Risk/Reward Ratings (RRR).

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