Market Trends of Sri Lanka Telecom Industry
Rising Demand for Wireless Services
- With the expansion of wireless services, more areas, including remote and rural regions, are gaining access to telecommunications. This improved connectivity enhances communication and opens up new markets for telecom operators. The rise in wireless services in the country has led to higher mobile phone penetration. As more people access mobile phones, the demand for telecom services grows, driving revenue for the sector. According to OpenSignal, as of 2023, Sri Lanka improved its video streaming experience by 37.6% with the introduction of 5G over 4G.
- In April 2023, the Reliance Jio-led India-Asia-Xpress (IAX) landed at Matara in Sri Lanka in collaboration with Dialog Axiata. Dialog Axiata landed the IAX subsea cable at Matara, marking Dialog's third and Sri Lanka's ninth installation. These strategic investments are poised to elevate Sri Lanka into a regional connectivity hub, bolstering the nation's digital transformation initiatives.
- Sri Lanka Telecom (SLT) has partnered with Fon Wireless to introduce its SLTGO Wi-Fi solution, which would give customers community-based Wi-Fi network connectivity services. The most extensive Wi-Fi network provides access to smartphones, laptops, and other mobile devices. The demand for deploying Wi-Fi solutions is expected to grow significantly with the increasing adoption of smartphone connections. For instance, in November 2023, Sri Lanka's mobile operator community collectively announced a set of new network APIs, marking their participation in the GSMA Open Gateway initiative. These APIs are designed to streamline the integration of digital services and applications, ensuring compatibility with Sri Lanka's mobile networks and numerous others globally.
- The nation's four major mobile operators (Bharti Airtel Lanka (Private) Limited, Dialog Axiata PLC, Hutchison Telecommunications Lanka Ltd, and SLT-Mobitel) have rolled out three key APIs: one-time password (OTP) validation, device location, and carrier billing. These APIs give developers and businesses a standardized approach to engage with over 21 million Sri Lankans, irrespective of their network provider.
- Government authorities are working with private organizations. For instance, in May 2024, the Sri Lankan government decided to amend its telecom laws to allow independent companies to build telecom towers. The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) seeks to create 276 towers to boost mobile broadband connectivity and sustain the rollout of 5G, both of which are needed to help facilitate the government’s plan to develop the country’s digital economy to USD 15 billion by 2030.
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OTT Services Drive Significant Market Growth
- OTT services like streaming video, music, and online gaming significantly increase data consumption. This boosts the demand for higher data packages and faster internet connections, leading to increased revenue for telecom operators.
- As OTT services become more popular, consumers are more likely to subscribe to internet plans that offer higher bandwidth and data limits. This increases the number of internet subscriptions and average revenue per user (ARPU) for telecom providers.
- In April 2024, Sri Lanka Telecom (SLT), in collaboration with its local partner Evoke International (Pvt) Limited, joined forces with Hungama Digital Media Entertainment (Pvt) Limited. SLT aims to enhance its broadband services through this strategic alliance, offering customers top-tier video streaming, music downloads, and gaming options. This move is set to revolutionize home entertainment, delivering a cinematic experience to households across Sri Lanka.
- Customers are migrating to mobile-based OTT services, thus creating new growth opportunities for the telecom market. According to Ookla Speedtest Global Index, Sri Lanka ranked 128th with a median mobile broadband download speed of 17.91 Mbps in May 2024. Mobile broadband subscriptions have increased, thus creating more demand for OTT service providers.
- Dialog, Sri Lanka's significant mobile telecommunications network, secured nine out of ten awards independently and shared the 4G Availability award with Airtel. These awards underscore Dialog's commitment to providing its users with significant experiences, excelling in mobile video streaming, multiplayer gaming, and utilizing over-the-top voice applications on cellular networks. In addition, Dialog users in Sri Lanka experienced the swiftest download and upload speeds.
