Bharti Airtel's entry into Sri Lanka well-timed
The customer base of both the fixed line and mobile sectors has grown by 60% between '05 and '06, reports PK Balachandran.india Updated: Jan 22, 2007 17:07 IST
Bharti Airtel's entry into the Sri Lankan telecom sector, as the fifth player in the mobile phones market, is well timed because the island's telecom sector is growing exponentially and contributing to the overall growth of the economy significantly.
"The customer base of both the fixed line and mobile sectors has grown by 60% between between 2005 and 2006, says Kanchana Ratwatte, Director General of Sri Lanka’s Telecommunication Regulatory Commission (TRC).
Currently, there are 5.4 million subscribers in the mobile phone sector, and 1.9 million in the fixed line sector, Ratwatte told Daily Financial Times here on Monday.
These figures are very significant since the total population of Sri Lanka is itself only 19.5 million. Mobile phones are ubiquitous in the urban slums and are penetrating the remotest villages too.
Dialog Telekom has 3 million subscribers, and SLT Mobitel (partly state owned) is aiming at reaching a figure of one million by the first quarter of this year.
Coverage has increased even as costs have come down.
According to Ratwatte, coverage had increased by 45 per cent and the prices had come down by 40 per cent in 2006.
Bharti to help bring down prices
And there is vast scope for expansion if prices come down further, says Ratwatte.
And it is here that the entry of Bharti Airtel is viewed with interest in the island.
"Bharti Airtel is likely to make this segment more price competitive for the benefit of the subscribers both existing and new ones," says Daily Financial Times.
And that is the company’s stated aim too.
Says Sunil Bharti Mittal, Chairman and MD: "With its extensive experience and unique business model, Bharti Airtel will strive to offer world-class services at affordable rates to the people of Sri Lanka."
The Indian company with the required 3G experience and price competitiveness, had piped Malaysia’s Maxis to invest $ 100 million in the first year, the paper said.
It would have to pay $4 million to the TRC as the licence fee, plus VAT, to begin work in the island.