Sri Lanka’s telecoms market experiences a reversal of fortunes due to Covid-19

Sri Lanka’s telecoms market experiences a reversal of fortunes due to Covid-19

Sri Lanka’s fixed-line telephony market was one of the very few in the world to experience a significant upsurge in subscriptions in 2020. While the country suffers from a relatively poor fixed-line infrastructure and a correspondingly strong mobile sector, demand for traditional phone services increased 14% in 2020.

Preliminary results suggest a further jump of up to 13% can also be expected in 2021. This will take Sri Lanka’s fixed-line penetration to levels not seen since 2013.

The most likely reason behind the market’s reversal of fortunes is the Covid-19 crisis and Sri Lanka’s ensuring lockdowns. These forced much of the population back inside and reverting to ‘traditional’ methods of communication for both voice and data services. The fixed broadband market was equally robust, growing 20% in 2020 alone. Sri Lanka possesses a relatively low number of computers per household, however, so the fixed broadband market’s success comes off a small base.

The one area of the telecommunications market that experienced a fall was the mobile segment. Up until the start of the pandemic, Sri Lanka had a very high mobile penetration rate of 155%. This near-saturation level reflected the preponderance for subscribers to carry multiple SIM cards to take advantage of cheaper on-net call rates. The reduction in demand and traffic because of the pandemic led to a sharp drop in the number of active subscriptions, down to just 135% – a 17% decline in just one year.

The market is expected to bounce back again quickly, just as soon as the country eases back on its lockdown measures and reduces travel restrictions. It will also be boosted, come 2022, by the anticipated launch of commercial 5G mobile services.

This report includes the regulator's market data to June 2021, telcos' financial and operating data updates to Q2 2021, Telecom Maturity Index charts and analyses, assessment of the global impact of Covid-19 on the telecoms sector, and other recent market developments.

Key developments:

  • Sri Lanka’s fixed-line telephone market grows significantly during the Covid-19 pandemic.
  • Regulator approves the introduction of MNP, expecting it to be implemented by May 2022.
  • Hutchison completes 5G trials with ZTE as its partner, achieving speeds of 1.8Gb/s.
  • Airtel Lanka completes 3G network upgrade to LTE, using spectrum in the 850MHz band.
  • SLT rebrands itself and its subsidiary under a single unified moniker, SLT-Mobitel.
  • SLT commits to investing in the proposed SEA-ME-WE 6 submarine cable system.
  • The Maldives Sri Lanka Cable (MSC), a second submarine cable linking the two countries, is ready for service.
  • Dialog Axiata opens a Tier 3 data centre in Piliyandala.

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Developing Telecoms market report summaries are produced in partnership with BuddeCom, the world’s largest continually updated online telecommunications research service.

The above article is a summary of the following BuddeCom report:

Report title: Sri Lanka - Telecoms, Mobile and Broadband - Statistics and Analyses

Edition: November 2021

Analysts: Sebastien De Rosbo

Number of pages: 139

Companies mentioned in the report: SLT (Sri Lanka Telecom), Mobitel, Dialog Axiata, DBN (Dialog Axiata group), Etisalat Lanka, Hutchison Lanka (Hutch), Airtel Lanka

Single User PDF Licence Price: US$890

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