The telecommunications sector in Sri Lanka had to develop under hard conditions because of the conflict with a separatist guerrilla. After the end of the war and the beginning of a thriving period in the country’s economy, the telecom sector was already well positioned for growth. Although Internet access services in their various forms and associated data services are finally taking off, coverage and accessibility continue to present challenges. The sophistication of the services available is only slowly improving.
The Internet penetration rate was slightly over 33% by the end of 2018. A national trunk network consists mostly of digital microwave radio relay; fiber-optic links now in use in Colombo area and fixed wireless local loops have been installed. 4 submarine cables provide connectivity to Asia, Australia, Middle East, Europe, and the US.
A nationwide fibre network is being deployed in Sri Lanka that will also provide international connectivity. This network is expected to become the backbone for future fixed broadband and mobile services. The Sri Lankan market is also preparing the migration to 5G mobile services. Trials were performed during 2019, including the resetting of existing antennae for 5G. The Telecommunications Regulatory Commission of Sri Lanka is the agency dedicated to promote sustained development in the telecommunication industry by shaping the regulatory process, protecting public interest and being responsive to challenges in an increasingly competitive market.
Sri Lanka is attempting to sustain economic growth while maintaining macroeconomic stability. The government’s high debt payments and bloated civil service, which have contributed to historically high budget deficits, remain a concern. In coming years, Sri Lanka will need to balance its elevated debt repayment schedule with its need to maintain adequate foreign exchange reserves. A new Inland Revenue Act was passed in 2017 in an effort to increase tax collection and broaden the tax base. Strong growth in tourism since the end of the war with local guerrilla has helped in increasing economic activity. Plans are in place to transform the country into a knowledge-based, export-oriented Indian Ocean hub by 2025.
Sri Lanka Telecom has a history of over 150 years, but since its privatisation in 1997 it has lost its monopoly in a number of key areas. The Sri Lankan market has progressively been opened up to more and more competition. In 2008, NTT sold its stake in SLT to Global Telecommunications Holdings N.V. of Netherlands, which currently owns 44.98% stake in Sri Lanka Telecom (SLT) whilst 50.50% is owned by the Government of Sri Lanka and the balance shares remain with the general public.