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Sri Lanka broadband use weak due to costs, low PC penetration: Fitch study
May 25, 2011 (LBO) - Sri Lanka's broadband use is lagging the region due to low penetration of personal computers and expensive mobile handsets, though the sector has now started to grow especially in the wireline segment, a sector study said.
Sri Lanka's broadband penetration was 6.0 percent one of the lowest in the Asia-Pacific region.
It compared with 9 percent for Indonesia, 16 percent for Thailand, 21 percent for Philippines, 28 percent for China, 60 percent for Malaysia, 110 percent for Singapore and 114 percent for Australia. In India also penetration was also low at 6.0 percent.
"The fixed‐broadband sector has languished due to a lower penetration of personal computers, necessary for access to ADSL broadband," Fitch Ratings said in a report on Sri Lanka's telecom sector.
"The adoption of wireless broadband services has been restrained due to a limited rollout of high‐speed packet access (HSPA) technology by the mobile operators, and the low affordability of 3G and 3.5G compatible handsets."
Sri Lanka had 574,000 broadband customers by end December 2010, including 294,000 mobile broadband users.
Sri Lanka Telecom (SLT), the country's only wireline operator has been pushing ADSL (assymetrical digital subscriber line) aggressively since last year notching up 213,000 customers by end December.
Fitch said it was equal to 24 percent of the firm's wireline base. Malaysia's UT group is now the effective managing shareholders, being the second largest shareholder after the state in SLT.
Mobile operators Dialog, a unit of Malaysia's Axiata, Mobitel (a unit of SLT) were giving HSPA broadband. Dialog, SLT, Suntel and Lanka Bell were giving WiMax (worldwide interoperability for microwave access) by take-up has been slow, Fitch Ratings said.
"Fitch expects the low broadband penetration to improve over the medium term, along with the expected growth in Sri Lanka’s post‐war economy, helped by the rollout of NGN (next generation network) technology by larger operators."
NGN networks are packet based and can transmit voice, data and video. Fitch said SLT plans to upgrade most of its copper network with optical fibre allowing speeds up to 20 Megabits per second by end 2013 to 90 percent of its wireline customers.
By end 2011, 40 percent of fixed customers will be converted to NGN and 66 percent by 2012. SLT had 8,000 kilometres of optical fibre which it was planning to increase by another 4,000 kilometres in 2011.
Dialog and Sri Lanka Telecom were also in the pay TV market. Dialog had 168,000 customers through a direct-to-home satellite service while SLT offered a IPTV services through its NGN network.
"The segment is benefiting from rising affordability by middle and lower income families in the country," Fitch said.
May 25, 2011 (LBO) - Sri Lanka's broadband use is lagging the region due to low penetration of personal computers and expensive mobile handsets, though the sector has now started to grow especially in the wireline segment, a sector study said.
Sri Lanka's broadband penetration was 6.0 percent one of the lowest in the Asia-Pacific region.
It compared with 9 percent for Indonesia, 16 percent for Thailand, 21 percent for Philippines, 28 percent for China, 60 percent for Malaysia, 110 percent for Singapore and 114 percent for Australia. In India also penetration was also low at 6.0 percent.
"The fixed‐broadband sector has languished due to a lower penetration of personal computers, necessary for access to ADSL broadband," Fitch Ratings said in a report on Sri Lanka's telecom sector.
"The adoption of wireless broadband services has been restrained due to a limited rollout of high‐speed packet access (HSPA) technology by the mobile operators, and the low affordability of 3G and 3.5G compatible handsets."
Sri Lanka had 574,000 broadband customers by end December 2010, including 294,000 mobile broadband users.
Sri Lanka Telecom (SLT), the country's only wireline operator has been pushing ADSL (assymetrical digital subscriber line) aggressively since last year notching up 213,000 customers by end December.
Fitch said it was equal to 24 percent of the firm's wireline base. Malaysia's UT group is now the effective managing shareholders, being the second largest shareholder after the state in SLT.
Mobile operators Dialog, a unit of Malaysia's Axiata, Mobitel (a unit of SLT) were giving HSPA broadband. Dialog, SLT, Suntel and Lanka Bell were giving WiMax (worldwide interoperability for microwave access) by take-up has been slow, Fitch Ratings said.
"Fitch expects the low broadband penetration to improve over the medium term, along with the expected growth in Sri Lanka’s post‐war economy, helped by the rollout of NGN (next generation network) technology by larger operators."
NGN networks are packet based and can transmit voice, data and video. Fitch said SLT plans to upgrade most of its copper network with optical fibre allowing speeds up to 20 Megabits per second by end 2013 to 90 percent of its wireline customers.
By end 2011, 40 percent of fixed customers will be converted to NGN and 66 percent by 2012. SLT had 8,000 kilometres of optical fibre which it was planning to increase by another 4,000 kilometres in 2011.
Dialog and Sri Lanka Telecom were also in the pay TV market. Dialog had 168,000 customers through a direct-to-home satellite service while SLT offered a IPTV services through its NGN network.
"The segment is benefiting from rising affordability by middle and lower income families in the country," Fitch said.
The i-Sri Lanka project was launched recently to enhance, upgrade and expand the fiber network, bringing it closer to customers through fiber node. This has reduced the length of the copper connections with a resultant significant increase in reliability, quality and broadband data speeds together with several other benefits such as low maintenance costs, a senior SLT official said. Through this program the SLT plans to enhance the network bringing high speed broadband connectivity at greater than 20Mbps speed for almost all its fixed customers over a 3-year period.
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