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Sri Lanka Airtel launches amid stiff competition
Jan 12, 2008 (LBO) - India's Bharti Airtel launched services in Sri Lanka with simplified tariff plans in an extremely competitive market of four existing players that has seen steep falls in prices ahead of the fifth celco's entry.
"We are a company that has operated in the most competitive markets," Airtel chief Rajan Bharti Mital told reporters in Colombo.
"We are prepared to face the market here and become the leaders."
Potential customers have been queuing up at the firm's outlets after an advertising campaign started a week earlier.
"The number of people who picked up pre-registration forms is unbelievably high," Mital said.
"We were humbled by the surging and overwhelming demand we have been seeing."
The firm declined to release numbers or the first year targets. Its basic package unveiled Monday is 2.00 rupees outgoing to any network, including its own, free incoming and one rupee for a text message, for a monthly rental of 300 rupees.
The tariff will increase to 2.50 rupee a minute after March 2009.
Airtel Lanka chief executive Amali Nanayakkara said tariff plans offered by the island's existing operators were complex.
"Tariffs are so confusing," she said. "Off peak, peak, off rate. It is so confusing. It prevents our customers from talking freely.
"We have spent many hours with our customers listening to their voice. They ask 'Why do I have to pay for incoming calls?' They also complain about network quality, congestion, call drops."
Nanayakkara says the average per minute tariff works out to about 5.0 rupees in Sri Lanka, compared with 2.70 in India and 1.60 rupees in Bangladesh.
The company says it hopes to attract new users as well as existing users from other networks.
Analysts say the firm is expected to score in the pre-paid segment, where tariffs are generally around 3.0 to 5.0 rupees a minute. Pre-paid is also the fastest growing area.
But Sri Lankan mobile users, especially in the budget end, have become unusually savvy at spotting value from complex tariff plans.
Young users in particular take pride in getting best value.
Even plans in the pre-paid market have options for frequently called numbers that give value.
Dialog Telekom, the island's market leader, has been bleeding in a street fight with other operators. Its 'blaster package' gives 1,000 free outgoing minutes a month, for a rental of 300 rupees.
Mobitel, a unit of Sri Lanka Telecom, has also been scoring with a tariff plan aimed at state workers.
"Airtel's package has to be materially cheaper for somebody to switch," says Channa Amaratunga, chief executive of CT Capital.
"Whether it is per second, 1000 minutes free or Upahara, the question is whether this plan undercuts existing ones.
"But whether the recent tariff cuts are benefiting existing operators is another matter."
Dialog Telekom fell 60 cents to 4.90 in intra-day trading Monday.
Sri Lanka's mobile penetration is about 50 percent. Dialog has about 5 million customers with a little more than 55 percent of market share, and Tigo said it had reached 2.0 million customers by December.
Airtel says it has invested about 100 million US dollars of a planned 200 million dollars to build 450 base stations. The network, outsourced to Huawei to build and operate, is operating in five out of nine provinces. It is now being rolled out in two other provinces, North Central and Uva. The North and East are not covered at the
Sri Lanka Airtel launches amid stiff competition
"We are a company that has operated in the most competitive markets," Airtel chief Rajan Bharti Mital told reporters in Colombo.
"We are prepared to face the market here and become the leaders."
Potential customers have been queuing up at the firm's outlets after an advertising campaign started a week earlier.
"The number of people who picked up pre-registration forms is unbelievably high," Mital said.
"We were humbled by the surging and overwhelming demand we have been seeing."
The firm declined to release numbers or the first year targets. Its basic package unveiled Monday is 2.00 rupees outgoing to any network, including its own, free incoming and one rupee for a text message, for a monthly rental of 300 rupees.
The tariff will increase to 2.50 rupee a minute after March 2009.
Airtel Lanka chief executive Amali Nanayakkara said tariff plans offered by the island's existing operators were complex.
"Tariffs are so confusing," she said. "Off peak, peak, off rate. It is so confusing. It prevents our customers from talking freely.
"We have spent many hours with our customers listening to their voice. They ask 'Why do I have to pay for incoming calls?' They also complain about network quality, congestion, call drops."
Nanayakkara says the average per minute tariff works out to about 5.0 rupees in Sri Lanka, compared with 2.70 in India and 1.60 rupees in Bangladesh.
The company says it hopes to attract new users as well as existing users from other networks.
Analysts say the firm is expected to score in the pre-paid segment, where tariffs are generally around 3.0 to 5.0 rupees a minute. Pre-paid is also the fastest growing area.
But Sri Lankan mobile users, especially in the budget end, have become unusually savvy at spotting value from complex tariff plans.
Young users in particular take pride in getting best value.
Even plans in the pre-paid market have options for frequently called numbers that give value.
Dialog Telekom, the island's market leader, has been bleeding in a street fight with other operators. Its 'blaster package' gives 1,000 free outgoing minutes a month, for a rental of 300 rupees.
Mobitel, a unit of Sri Lanka Telecom, has also been scoring with a tariff plan aimed at state workers.
"Airtel's package has to be materially cheaper for somebody to switch," says Channa Amaratunga, chief executive of CT Capital.
"Whether it is per second, 1000 minutes free or Upahara, the question is whether this plan undercuts existing ones.
"But whether the recent tariff cuts are benefiting existing operators is another matter."
Dialog Telekom fell 60 cents to 4.90 in intra-day trading Monday.
Sri Lanka's mobile penetration is about 50 percent. Dialog has about 5 million customers with a little more than 55 percent of market share, and Tigo said it had reached 2.0 million customers by December.
Airtel says it has invested about 100 million US dollars of a planned 200 million dollars to build 450 base stations. The network, outsourced to Huawei to build and operate, is operating in five out of nine provinces. It is now being rolled out in two other provinces, North Central and Uva. The North and East are not covered at the
