WiMAX set to drive broadband growth in Sri Lanka?

Sky Network: WiMAX offering set to shake up Sri Lanka's broadband market?

News items from Sri Lanka's mobile market have caught the eye of DevelopingTelecomsWatch a few times of late. Most recently, DTW asked whether the arrival of the UAE's Etisalat as a player on the island nation's cellular scene would cause price competition to become even fiercer. It was noted that a sustained price war has been eroding tariffs and weakening cellcos' profitability over the last four years. Since then, further worrying figures from the country's telecoms sector have been released.

On November 11th, for example, Reuters reported that market leading MNO Dialog Telkom posted a fifth straight quarterly net loss for Q3 2009, disappointing analysts who had predicted the company would break even. Reuters reports that the telco, a unit of Malaysia's Axiata lost 438.9 million Sri Lankan rupees (USD 3.83 million) in the quarter which ended on September 30th. As well as margins being squeezed by fierce competition, the Reuters piece traces a link between between this loss and profit remaining elusive at Dialog Telekom's broadband and direct-to-home satellite TV operations.

That's the latest from the Sri Lankan mobile market. What, though, of the country's incumbent wireline operator, Sri Lanka Telecom (SLT)?

SLT, which was part-privatised in 1997, hit the headlines this week for its efforts to improve the availability of its services in the country's Northern and Eastern provinces, the areas affected by the on-and-off conflict between government forces and the Tamil Tigers, which ended earlier this year after twenty-six long years.

Harshini Perera of Sri Lanka's Daily News writes that SLT has addressed the need to improve its services in these areas by expanding its copper and fibre access networks, installing new exchanges and the CDMA base stations.

With a view to improving its broadband offering across the whole island, Sky Network, a subsidiary of SLT, will, according to Sri Lanka's Daily Mirror, be providing the WiMAX services to parts of the country where ADSL services are not offered. The Daily Mirror reports that the venture will commence operations in March 2010 and will initially provide services to Colombo, Gampaha and Kalutara Districts.

It will be interesting to watch for the impact this WiMAX offering has once launched. Australian telecoms research company BuddeComm's Sri Lanka Internet Market report indicates that Internet access and other forms of data services have lately been starting to take off in the country, but that coverage and accessibility remain limited, with user penetration estimated by the ITU to be at around 6% by the end of 2008. Buddecomm's report contends that early moves to offer broadband Internet in Sri Lanka have met with only limited success, albeit with some promising signs of growth in 2008-09. The report notes that early activity in the wireless broadband segment of the market has not yet translated into significant subscriber numbers.

2010 looks to the year during which it will become apparent whether wireless access technologies will contribute significantly to the growth of broadband services in Sri Lanka.

WiMAX set to drive broadband growth in Sri Lanka?

India's WiMAX/3G debate revisited

It does seem to be India week here on Developing Telecoms Watch. When I posted a link to this blog at the Mobile Consultants LinkedIn group, a member who has worked as an RF networks engineer for a number of the country's cellular operators was very keen to assert in response that his market is "the blue eyed baby for the [global] telecom sector nowadays and adding 8 million subs per month". In my respondent's view, interesting developments to look out for in India will include:

• Site sharing to save OPEX and CAPEX, with "some operators [having] set annual targets of 50-60% incremental sharing".
• As a result of looking at carried traffic and site utilization, "operators are taking a call to switch off some sites during night time to save OPEX".
• Single billing systems for all services provided by an operator, such as mobile, DTH, data usage, IPTV etc.
• Operators identifying common weak coverage areas and areas in high security zones - and planning single sites instead of deploying multiple sites in those areas.
• Operators waiting for number portability "to be deployed ASAP to maximize their revenues".

I concluded Sunday's India-themed post by choosing to infer from a recent report by consultants BDA that there seems to be reasonable case for WiMAX and an even stronger one for 3G in India. Since then I've read articles in which the prospects for both are enthusiastically talked up.

Making the case for 3G, in an interview in an interview with Business Line yesterday was Mr P. Balaji, Ericsson India's VP of Marketing and Strategy. Balaji asserts that Indian operators will be able to roll out services with minimal additional infrastructure costs and that 3G will help to bridge the urban-rural digital divide. "Telemedicine, e-education and e-governance can be offered through 3G in rural pockets," says Ericsson's Balaji, "and this is bound to improve the quality of life of the people."

Asked how 3G stacks up against WiMAX, Balaji states "we believe the Government should leave it to the market forces and not dictate technology choices" and that in his opinion "3G will score in the Indian telecom market because it offers greater economies of scale, faster time to market and multiplicity of handsets".

This is not very surprising. Outlined in a white paper released last month, the Ericsson view of comparisons between WiMAX and HSPA can is as follows: "While the peak data rates, spectral efficiency and network architecture of HSPA Evolution and Mobile WiMAX are similar, HSPA offers better coverage. In short, Mobile WiMAX does not offer any technology advantage over HSPA. What is more, HSPA is a proven mobile broadband technology deployed in more than 100 commercial networks... [and] can be built out using existing GSM radio network sites and is a software upgrade of installed W-CDMA networks. Compared with other alternatives, HSPA is the clear and undisputed choice for mobile broadband services."

The Swedish vendor certainly seems to have lost enthusiasm for the IEEE 802.16 family of standards since making extremely positive noises when joining the WiMAX Forum in December 2004.

Feeling more upbeat about WiMAX in India is research and consulting house Strategy Analytics, whose recent study sees the country's WiMAX subscriber base hitting 14 million by Year 2013 and growing annually by nearly 130%. An Economic Times article on Saturday indicated that the Strategy Analytics report predicts initial investment in WiMAX ventures will top $500 million in India. The US-based research firm feel that after initial deployments primarily in major urban areas pockets, "WiMAX will find relatively greater utility and less competition from competing technologies in smaller towns and villages."

This last point seems to go head-to-head with the claims made by Ericsson's Balaji regarding his envisioned role for 3G networks in India's rural areas. I wonder who will turn out to be right? Or will it be a case of both being half-right?

Another thing for me to wonder about: I wonder if tomorrow will be the day when I finally managed to discuss something other than India's WiMAX and 3G prospects here...

India's WiMAX/3G debate revisited