Sri Lanka Telecom is losing its monopoly in a number of key areas earlier on led the way and since then the market has progressively been opened up to more and more competition. While mobile penetration has historically been relatively low compared with other more developed Asian markets, it is now catching up. The penetration of fixed lines in Sri Lanka declined sharply from to 13% in 2013 from 17% in 2012. Since then penetration been very slightly declining, reaching 12.4% in 2015 and 12.3% in 2016.
Demand for broadband data services driven by 3G and 4G adoption and increased smartphone penetration should drive reasonably strong growth in the local market moving into 2016 and 2017. Consolidation in Sri Lanka over the next few years is possible since the market is finding it difficult to sustain all five operators.
The highly competitive mobile market in Sri Lanka had been running with a healthy overall annual growth rate for some years. The mobile subscriber growth rate in Sri Lanka has been strong between 2011 and 2016. Mobile market penetration increased from 87% in 2011 to 105% in 2014, 116% in 2015 and 123% in 2016. The rate of growth will begin to decline over the next five years to 2021 as the market reaches a heightened state of maturity. Mobile broadband is growing strongly in Sri Lanka, driven by strong mobile subscriber growth. Market penetration has increased from 8% in 2013 to 13% in 2014 and is predicted to reach 18% in 2016.
The market has undoubtedly benefited from its liberalisation and the competition that came with five operators continuing to battle it out for market share. However consolidation in Sri Lanka over the next few years is possible since the market is finding it increasingly difficult to sustain all five operators. In December 2015 Dialog Axiata, was believed to be in negotiations to buy Bharti Airtel Lanka for USD100 million. By September 2016 the merger deal between Dialog Axiata and Bharti Airtel still had not occurred.
The early moves to offer broadband in the country met with limited success and it seemed that it would be some time before there is a substantial broadband market. However, by 2016 fixed broadband internet services were being supplemented by a rapidly expanding mobile broadband segment. Also during 2016 the availability of e-commerce applications including mobile banking, e-bus ticketing, and mobile points of sale (POS) continued to increase. Demand for broadband data services driven by 3G and 4G adoption and increased smartphone penetration should drive reasonably strong growth in the local market over the next few years.
Fixed broadband penetration in Sri Lanka is increasing strongly from a very small base. Penetration increased from 1.7% in 2012 to 2.6% in 2014 and 3.7% in 2016. Fixed broadband penetration is predicted to grow strongly to reach over 8.% by 2021.
For detailed information, table of contents and pricing see: Sri Lanka – Telecoms, Mobile and Broadband – Statistics and Analyses
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