Sri Lankans wireline phones drop with mobile growth

Apr 17, 2010 (LBO) – Use of wireline phones, supplied only by the listed Sri Lanka Telecom, a former state monopoly, is on the decline, with subscribers shifting to mobile phones, the latest official data showed.

The number of mobile connections increased by 25.9 percent to 13.9 million in 2009 from the year before, while fixed telephone lines fell by 0.5 percent to 3.4 million, the Central Bank said in its annual report.

This meant there was an overall growth of 19.6 percent to 17.4 million phone connections in 2009 when compared to that of 2008.

The report said that the number of fixed line phones fell in 2009 with the number of wireline phones falling 6.7 percent because of a shift to mobile phones whose costs have fallen sharply owing to a price war.

The number of fixed wireline telephones in use fell 6.7 percent to 871,000 in 2009 from 934,000 in 2008 when growth had been a mere 0.2 percent, the report said.

“Expansion in coverage and introduction of improved and value added services for comparatively lower price by mobile service providers due to severe competition in the industry brought about discontinuation of existing fixed access telephone connections…,” the Central Bank said.

Sri Lanka’s mobile telecom industry was plunged into the red Mobitel, an existing fir, offered a cut-price package for state workers ahead of the entry of Bharti Airtel as the fifth operator.

But the move away from fixed access lines is a phenomenon that has been noted in developed telecom markets two decades ago.

New value added services, technological advancements and reduced calling and connection charges resulted in a higher growth in the mobile telephone connections, the report said.

The increase in mobile connections led to an increase in the mobile penetration rate (mobile connections as a percentage of total population) to 68.2 percent in 2009 from 54.8 percent in 2008.

Telephone density or the number of phones per 100 persons including cellular phones, increased to 85 in 2009 from 71.9 in 2008, the Central Bank said.

Growth in fixed wireless phones also fell to just 1.9 percent in 2009 when there were 2,560,000 connections, from a growth of 38.8 percent in 2008.

Sri Lanka’s fixed access wireless, offered by Lanka Bell, Suntel, Dialog Telecom and Sri Lanka Telecom is based on CDMA (code division multiple access) offering limited mobility.

The number of internet and e-mail subscribers grew 2.6 percent to 240,000 in 2009, a much slower growth than the 15.8 percent growth the year before.