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Sri Lanka - Telecoms, Mobile and Broadband - Statistics and Analyses

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Last updated: 18 Apr 2020 Update History

Report Pages: 123

Analyst: Sebastien De Rosbo

Sri Lanka prepares for 5G auction

Sri Lanka is building a national fibre network linked to numerous international cables. This 45,000km network, built and managed by Sri Lanka Telecom, will serve as the backbone for fixed broadband and mobile services, including 5G.

The government’s Board of Investment of Sri Lanka supports the development of the telecom sector. Its funding as approved in 2018 and 2019 provided significant investment for network expansion and upgrades to mobile and fixed broadband infrastructure.

The market is now preparing to move from 4G towards 5G mobile services. Dialog Axiata and Mobitel conducted pre-commercial 5G trials during 2019, and Dialog has thus far repurposed 20% of its LTE antennae for 5G.

The fierce competition in the mobile market pushed Hutchison Lanka to merge with Etisalat Lanka in December 2018, being rebranded as Hutch and becoming the third largest operator in the country.

Sri Lanka has seen a very strong increase in mobile broadband penetration over the past six years, driven by rising usage of online video and the price drop of LTE-enabled smartphones. However, the market remains at an early stage of development, with penetration well below most other developed Asian countries. Strong growth is predicted over the next five years at least.

Fixed broadband penetration in Sri Lanka remains very low, partly due to poor fixed-line infrastructure and partly to the dominance of the mobile platform. However, the market has developed well over the last few years, albeit from a low base, and is supported by the two main telcos providing bundled service offerings including mobile, fixed broadband and video content. The telecom sector overall is being bolstered by the continuous expansion of the fibre and LTE networks, as well as growing investment in 5G.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key developments:

  • Dialog Axiata and Mobitel (Group SLT) run 5G pre-commercial tests, aiming to invest $254 million in network expansion;
  • Fixed broadband penetration remains relatively low but is growing steadily;
  • Maldives Sri Lanka Cable (MSC) is commisioned, expected to be lit at end-2020,
  • Telecommunication Levy is reduced to 11.25% of telecom service revenue;
  • High mobile penetration leading to slow-down in market growth;
  • Mobile broadband subscriber growth continuing steadily, supported by wider LTE coverage and cheaper LTE-enabled devices;
  • Telco market remains resilient despite the difficult macro environment (economic crises, presidential election and terrorist attacks);
  • Report update includes the regulator’s market data to December 2019, telco’s operating and financial data for Q4 2019, Telecom Maturity Index charts and analyses, assessment of the global impact of COVID-19 on the telecoms sector, recent market developments.

Companies mentioned in this report:

SLT (Sri Lanka Telecom), Mobitel, Dialog Axiata; DNB (Dialog Axiata group), Etisalat Sri Lanka; Hutchison Lanka (Hutch); Bharti Airtel Lanka, Lanka Bell, Suntel.

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