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Management Report
Published: November 2009
Pages:  80
Tables: For full details, please email keithw@cmsinfo.com
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Research from: Paul Budde Communication Pty Ltd.
Sector: Mobile Markets

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:- November 2010

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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Table of Contents

1. Key Statistics
2. Telecommunications Market
2.1 Overview of Sri Lanka’s telecom market
2.2 Background to development
3. Regulatory Environment
3.1 Licences
3.2 Historical overview
3.3 Deregulation
3.3.1 EGO Licences – International licences
3.3.2 International Traffic Bypass Control rules
3.3.3 Convergence Act
3.4 Privatisation
3.4.1 SLT
3.5 Telecommunications Regulatory Commission (TRC)
3.6 National Policy on Telecommunications
3.6.1 Adoption in 1998
3.6.2 The years 2001 - 2005
3.6.3 Proposed Ten Year Development Plan (2006 -2016)
3.7 Calling Party Pays (CPP)
4. Fixed Network Operators in Sri Lanka
4.1 Overview of operators
4.2 SLT (formerly Sri Lanka Telecom)
4.2.1 Company overview
4.2.2 Financial overview 2008-2009
4.2.3 Privatisation and ownership of SLT
4.2.4 Mobitel
4.2.5 IPTV
4.2.6 WLL
4.2.7 National and international networks
4.3 Suntel
4.3.1 Network roll-out
4.3.2 MTNL’s acquisition plans
4.4 Lanka Bell
4.5 Dialog Broadband Networks (DBN)
4.6 Other operators
5. Telecommunications Infrastructure
5.1 Overview
5.2 National telecom network
5.2.1 Wireless Local Loop (WLL)
5.2.2 Fibre optic network
5.2.3 Payphones
5.2.4 Numbering plan
5.2.5 Internet Protocol (IP) networks
5.2.6 Rural communications
5.3 International infrastructure
5.4 Telecom City Project
6. Internet Market
6.1 Overview
6.1.1 Internet control and censorship
6.2 Internet exchange
6.3 Public Internet access
6.4 ISP market
6.4.1 Lanka Internet services
6.4.2 SLTNet
6.4.3 Suntel wOw
6.4.4 BellNet
6.4.5 Wishya Online (Pvt) Ltd
6.4.6 ITMIN Ltd
6.4.7 Eureka Online (Pvt) Ltd
6.4.8 Pan Lanka Networking (Pvt) Ltd
6.4.9 Lanka Global Online
6.5 E-commerce
6.6 E-government
7. Broadband Market
7.1 Overview
7.1.1 School Net project
7.2 Digital Subscriber Line (DSL)
7.3 Wireless broadband / WiMAX
7.4 Fibre to the Building (FttB)
8. Broadcasting
8.1 Market overview
8.2 Regulatory environment
8.3 Internet Protocol TV (IPTV)
8.3.1 SLT’s IPTV
8.4 Cable and pay TV
8.4.1 Comet Cable
8.4.2 Dialog TV (DTV)
8.4.3 TV & Radio Network (Pvt) Ltd
8.5 Free-to-Air (FTA) TV
9. Mobile Communications
9.1 Overview of Sri Lanka’s mobile market
9.2 Major mobile operators
9.2.1 Dialog Telekom (MTN)
9.2.2 Mobitel
9.2.3 Tigo (formerly Celltel Lanka)
9.2.4 Hutchison Lanka
9.2.5 Bharti Airtel Lanka
9.3 Third Generation (3G) mobile
9.3.1 Dialog Telekom 3G
9.3.2 Mobitel 3G
9.3.3 Bharti Airtel 3G
9.4 Satellite mobile
9.4.1 MTN Networks
9.4.2 Mobitel
9.4.3 Dialog Telekom
10. Forecasts
10.1 Scenario forecasts
10.2 Forecasts – fixed-line market – 2008; 2013; 2018
10.3 Forecasts – Internet services – 2008; 2013; 2018
10.4 Forecasts – mobile services – 2008; 2013; 2018
11. Glossary of Abbreviations
Table 1 – Country statistics Sri Lanka – 2009
Table 2 – Telephone network statistics – June 2009
Table 3 – Internet user statistics – June 2009
Table 4 – Mobile statistics – March 2009
Table 5 – National telecommunications authorities
Table 6 – National network status – June 2009
Table 7 – Number of telecom operator licences by category – June 2009
Table 8 – Fixed-line operators and subscribers – 2008
Table 9 – SLT fixed-line subscribers and market share – 1999 - 2009
Table 10 – SLT fixed-line subscribers – Wireline versus WLL – 2005 - 2008
Table 11 – Suntel subscribers – 1999 - 2008
Table 12 – Lanka Bell subscribers – 1999 - 2009
Table 13 – Fixed lines in service and teledensity – 1995 - 2009
Table 14 – WLL subscribers – 1996 - 2009
Table 15 – Internet users – 1996 - 2009
Table 16 – Internet subscribers – 1994 - 2009
Table 17 – International Internet bandwidth – 1998 - 2008
Table 18 – SLT’s DSL broadband subscribers – 2005 - 2008
Table 19 – Broadband subscribers – 2002 - 2009
Table 20 – Broadband subscribers and households - 2008
Table 21 – Key broadcasting statistics – 2008
Table 22 – Mobile subscribers and penetration – 1995 - 2009
Table 23 – Mobile operators, subscribers and annual change – March 2009
Table 24 – Mobile operator market share based on subscribers – March 2009
Table 25 – Dialog Telekom subscribers and market share – 2004 - 2009
Table 26 – Dialog Telekom prepaid subscribers – 2004 - 2009
Table 27 – Dialog Telekom ARPU – postpaid, prepaid and blended – 2004 – 2005; 2007 - 2009
Table 28 – Mobitel subscribers and market share – 2004 - 2009
Table 24 – Tigo Sri Lanka subscribers - 2004 – 2009
Table 29 – Hutchison Lanka subscribers and market share – 2006 - 2009
Table 30 – 3G mobile operators and subscribers – March 2009
Table 31 – Forecast fixed line subscribers and penetration rate – 2008; 2013; 2018
Table 32 – Forecast Internet subscribers and penetration rate – 2008; 2013; 2018
Table 33 – Forecast mobile subscribers and penetration rate – 2008; 2013; 2018
Exhibit 1 – Telecommunications system operator licensees
Exhibit 2 – Major shareholders in SLT
Exhibit 3 – External Gateway Operator (EGO) licences
Exhibit 4 – Licensed Internet Service Providers (ISPs) – 2009
Exhibit 5 – Special rural subscriber tariffs

For full details, please email keithw@cmsinfo.com

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