March 13 (LBO) – Intense competition among Sri Lanka’s telcos will drive growth, with Dialog leading the pack and lifting earnings of its parent Malaysia Telecom, the investment bank Morgan Stanley said in a report. Sri Lanka is expected to top foreign contribution to Malaysia Telekom with 13 percent, followed by Bangladesh at six percent and Indonesia five percent. “While the Sri Lankan market offers strong growth prospects over the next 1-2 years given low penetration and increasing capex from operators, we believe competition will likely intensify in the coming 12 months as new 2G/3G licensee Bharti enters the market and as Sri Lanka Telecom’s mobile service (Mobitel) targets rapid market share gains,” Morgan Stanley said in a equities research report.
The report covered what the investment bank calls the ‘next frontier’ markets of Sri Lanka, Vietnam; and Bangladesh.
The report said India’s Bharti may be able to make inroads into the Sri Lankan market through effective use of cross-border roaming initiatives, though it may take 18 to 24 months for the firm to build a large enough network to challenge existing players.
Network roll-out for new entrants takes time as get