Stumbling Block

May 17, 2011 (LBO) – Sri Lankan celcos are showing signs of recovering from cut throat competition and soaring inflation a few years ago, but experts say the recovery is short lived as the sector has already hit its next stumbling block. Shorter life spans in emerging technologies and ill advised expansion plans are the latest threat to the sector’s future sustainability.

Rohan Samarajiva, chief executive of South Asian think-tank LIRNEasia, says most Sri Lankan celcos burnt their fingers migrating to 3G (Generation).

Most 3G networks are notorious for weak signal strengths; hence data speeds are much slower than promised.

“I think from a consumer perspective it really doesn’t matter, prices are set by markets and not in relation to costs and I don’t care if my provider writes-off or doesn’t,” Samarajiva said.

“From an investors’ perspective they should be looking at the track record of management in understanding technology trends and making the right kind of decisions.

“Because for example if they had set a short depreciation period they don’t have to do write-offs; if they are doing too many write-offs purely looking at a technology perspective then they are guessing wrong.”

The Sri Lank