Sri Lanka: Competition and Controversy

Sri Lanka is a small island nationcovering approximately 66,000 km2 in the Indian Ocean, offering access to Asia and the Middle East. The majority of its 21 million people live in the rural areas; urban residents account for just 15% of total population.

Sri Lanka’s telco industry is characterized by intense competition, with mobile operators fighting for a share of the relatively small addressable population of 21 million people.

Around 45-50% of peoplein Sri Lanka own a mobile phone now. Although this is high in comparison to most of the developing world, the figures are low in comparison to mature markets which typically see penetration rates between 60-80%. Higher rural mobile ownership and greater smartphone ownership would be key to raising the penetration rates. An important market trends is the rising use of mobile data, with most of the usage being prepaid. Operators are increasingly designing short-term, flexible tariffs in order to promote usage amongst low-mid income customer segments

However more recently mobile penetrationhad risen from 96% in 2012 to 126% in 2017. Slow to moderate growth is predicted over the next five years to 2022. The market will be constrained from higher growth due to very strong local competition and a saturated mobile market.

Sri Lanka has seen a very strong increase in mobile broadband penetration over the past five years with market penetration increasing from 8% in 2012 to 21% in 2017, driven by a rising level of mobile subscribers. However, the mobile broadband market is still at an early stage of development with penetration well below most other developed Asian countries.

The development of the internet remains of particular concern for Sri Lanka. Coverage and accessibility remains limited and the sophistication of the available services generally remained low.

However the last three years in particular have seen very strong growth led by the market leader Dialog Axiata.

At end-2017 the company reported a total of 12.797 million mobile subscribers. GSMA Intelligence placing its market shareat 45 per cent in Q1 2018.

The telco has pledged investment in high speed 4G and fixed LTE broadband infrastructure, as mobile LTE coverage reached 43% of the population at end-2017, while TD-LTE coverage was 53%. They also carried out a 5G' network capability trial with technology partners Ericsson and Huawei in Colombo.

Mobitel was the first service provider with a super 3.5G network in South Asia. Furthermore, Mobitel successfully demonstrated HSPA + MIMO technology with downlink speeds of up to 28.8 Mbps and carried out a successful trial of 4G/LTE technology with downlink speeds exceeding 96 Mbps, for the first time in the South Asian region. In addition, Mobitel recently launched Dual Carrier HSPA+ technology and it is now equipped with the country’s first mobile 4G/LTE equipment.

They currently have a 24 per cent market share according to GSMAIntelligence  and 6.8 million subscribers.

Ookla® has declared the National Mobile Service Provider, Mobitel, its Speedtest Award Winner for having the Fastest MobileNetwork in Sri Lanka.Mobitel dominates rival networks in the country in terms of network speed on broadband to emerge No. 1 in the industry. Mobitel 4G LTE technology offers users the superior experience of enjoying high definition streaming videos and Multimedia Online Gaming (MMOG).  Mobitel also recently enhanced its 4G LTE network coverage by innovatively deploying its existing 900MHz spectrum. This initiative is Sri Lanka’s first such deployment, thus significantly enhancing Sri Lanka’s 4G LTE coverage and LTE MIMO technology, making Mobitel the No.1 network in Sri Lanka.

A recent major development is the announcement that Hutch and Etisalat plan  to combine their Sri Lankan operations in a bid to better position them to serve customers in the country. The takeover would see the Sri Lankan market reduced to four from five mobile operators.

“This transaction is part of the stated strategy of portfolio optimisation of the Etisalat Group,” the pair said in a joint statement, adding CK Hutchison will have the majority and controlling stake in the new entity when the deal is complete.

The move will see the number three and four operators coming together.  GSMA Intelligence place the market share of the two companies as of Q1 2018:  Etisalat Lanka (13 per cent), Hutch Lanka (10 per cent).

The completion of the transaction is subject to conditions, including regulatory approvals.

Local reports state Etisalat’s ten year mobile operating licence in Sri Lanka expires in September.

Bharti Airtel Lanka a subsidiary of Bhari Airtel, they started operating in Sri Lanka in January 2009. According to their website they have invested of over $350 million in the Sri Lanka operations, and are the latest and fifth entrant to Sri Lanka’s telecom landscape. Their impact in the market includes the introduction of several innovative services, such as the lowest rates for voice services, per second billing, the lowest IDD rates, the lowest international voice and data roaming rates. With over 45,000 touched points established across the island, the company’s subscriber base has grown to 1.8million, located across all regions in the country.

For more on coverage available on these operator networks please see the Open Signal report.

Data provided by OpenSignal last month agrees with the analysis of Ookla that Mobitel is indeed the operator with fastest download speeds but latency of both 3G and 4G is much better in Dialog.

In March 2018 authorities completely shut down the internet in the district of Kandy , in response to acts of sectarian violence. The government blamed social media for spreading hate speech and calls to violence.

As far as researchers know, most of these shutdowns have occurred at the behest of government authorities, who order telecommunications companies to press the proverbial ‘kill switch.’

Telecommunications companies usually have little choice but to follow these orders. In some cases, they offer subscribers some explanation of the cut in service. But more often, they don't.

AFP news agency reported that Internet access has been stopped entirely to the Kandy district “after discovering rioters were using online messaging services like WhatsApp to coordinate attacks on Muslim properties”.

However blocking public communications networks is ill-advised at any time, and especially bad during a crisis, when people are frantically seeking situation updates or sharing information about the safety of loved ones.

Blocking selected websites or platforms is a self-defeating exercise in any case, since those who are more digitally savvy – many hate peddlers among them – will now use proxy servers to get around. It is the average web user who is deprived of news, views and updates. Such information vacuums can allow rumours to spread fast and wide.

Related Posts:

• The Global Reach of Hutchison / '3' Group Mobile Telecom Companies

Different Types of Mobile Operators

While most of the time we talk about Mobile Network Operators (MNOs) in this blog, there are other types of mobile operators that's good to be aware of.

For example we recently wrote about Lycamobile, which is the worlds largest International Mobile Virtual Network Operator (MVNO). Similarly when we wrote about the Hutchison / Three group companies, we mentioned that Hutchison Mobile Enabling Solutions or 'hue' is their MVNE Mobile Virtual Network Enabler) that is enabling MVNO's worldwide.

To learn about the different types of mobile operators, below is a presentation with embedded video in the end.

MNO, MVNO, MVNA, MVNE: Different types of mobile operators from 3G4G

Three Middle East Operators launch 'World's First' 5G Networks

I am sure you have heard of the saying, "Good news comes in threes". Well, what better than to have three Middle East operators claim World's First 5G Networks.

1. Ooredoo, Qatar:

Picture Source: IloveQatar

In a press release on 14 May, Ooredoo announced:

Ooredoo has today announced that the company is the first operator in the world to launch a live 5G network on the 3.5GHz spectrum band.

The breakthrough announcement was made in an event attended by Ooredoo senior management at the Ooredoo Tower in West Bay. Attendees were also briefed on the first Ooredoo 5G site which was accomplished just days after Ooredoo’s new 5G Commercial Core Network was activated.

Ooredoo’s 5G network is the first commercially available 5G network in the world and is an important technological breakthrough for the telecommunications industry worldwide.

Speaking at the event, Waleed Al Sayed, Chief Executive Officer, Ooredoo Qatar, said: “Today, Ooredoo and Qatar make history. We are the first company in the world to offer access to 5G technology and services, and the people of Qatar are the first to have access to the incredible benefits this technological upgrade will bring. We dedicate this important milestone to the people of Qatar and to our beloved leaders, who have encouraged this step in building the knowledge-based economy of Qatar.”

The first stage of Ooredoo’s 5G Supernet deployment will cover an area from The Pearl Qatar to Hamad International Airport, with Lagoona, Katara Cultural Village, West Bay, the Corniche and Souq Waqif also included in the initial commercial launch coverage area.

The Ooredoo 5G service offers the latest network technology (5G NR) meaning much higher speeds, capacity, and better latency, than existing cellular systems. The new network will bring advantages over the previous generations of cellular technology and will enable business and consumer customers to unlock more of their potential and explore opportunities that were simply not possible before 5G.

“Ooredoo has been a leader in 5G service deployment since 2016. We have invested in the testing and installation of our 5G network so that we can confidently open its benefits fully to our people and the world. The 5G Supernet will be the infrastructural backbone of Qatar as our nation pushes to offer the latest smart applications in-line with Qatar National Vision 2030. This network will provide the necessary foundation to introduce a wave of new innovations, including driverless cars and smart roads, virtual and augmented reality, a national fleet of service drones, and much more,” added Waleed Al Sayed.

In becoming the first company in the world to deploy commercial 5G, Ooredoo has built upon an impressive number of earlier milestones, including the first-in-the-region trials of 5G on Qatar National Day in 2016, the completion of 10 5G-ready base stations in May 2017, and the launch of the 5G Business services trial in partnership with Qatar Airways in November 2017.

Access to the Ooredoo 5G Supernet will require a 5G compatible device from Ooredoo. The company has announced that this is just the beginning of the Ooredoo 5G network, which will continue to be expanded over the coming months to cover even more areas of Qatar.

A video from the launch event as follows:




2. Saudi Telecom Company (STC), Saudi Arabia

Picture Source: TelecomDrive

In a very short press release on 15th May, STC announced:

STC announced the first live 5G network in MENA. This launching is the initial phase for operating the service once 5G special devices are available in the global markets. 

In January 2017, STC succeeded in advanced technical experiments and trials on 5G technology as part of the company's strategy of leading technological development and leading modern and advanced services. 

The widespread use of 5G will facilitate the dissemination of information, promote prosperity of the common digital economy and accelerate changes in productivity methods and lifestyles.

Back in March STC had announced a collaboration with Nokia for 5G launch.

5G with STC pic.twitter.com/I2eM30yorJ

— FahadSAM (@fahad5011) May 15, 2018

TelecomDrive notes:

Eng. Nasser Al Nasser, STC Group CEO, expressed his proudness of this initial launching that confirms STC`s pioneering position in providing innovative services for the customers around the Kingdom and the region. He added:’ we have confidence, knowledge, and innovation, which will enable us to lead the 5G era”. He said:” the launching of 5G started with operating a number of towers, initially, in the eastern region”. Al Nasser added:”the company will continue working on building the network construction gradually in the cities of the Kingdom until the devices are available during of 2019”

Great, we already have a 5G connected car #MWC18 pic.twitter.com/MGRmR11SuX

— Zahid Ghadialy (@zahidtg) February 28, 2018

3. Etisalat, UAE

'Khaleej Times' and 'The National' and many others ran an article on the 14th May about Etisalat 5G launch. There were no photos or videos and the press release noted:

In the first phase of the launch, 5G fixed wireless services (fixed and internet services) will be provided in selected locations in UAE, which will gradually expand to other parts of the country depending on consumer demand and requirements. The commercial fixed devices and services will be available for consumers starting from September this year.

Saleh Al Abdooli, CEO, Etisalat Group applauded the efforts of the entire team, he said: "Today's announcement is a historic moment for the company as the commercial launch of the 5G network will set a milestone for the UAE. Etisalat today is the first telecom operator in the world to provide this ultra-high 5G C-band data speed as a commercial service over the wireless network.

The press release on Etisalat's own website says:

“The launch of the 5G network and associated applications will also bring in an immense potential for all stakeholders providing them a platform to innovate, launch futuristic applications and empower the next generation with digital capabilities. As a company our vision ‘Driving the Digital Future to Empower Societies’ is also focused on making this digital future a reality by facilitating innovation, creativity and bringing technologies of the future to all our audiences across our markets.” 

Keeping in line with its vision of bringing in digital innovation, Etisalat was on track as the first operator in the MENA region to launch the first commercial 5G wireless network achieving a technology milestone and set an industry benchmark. Etisalat is the first operator to have a fully developed commercial 5G network available to provide gigabit internet services to its customers.

Now that the first 5G networks have been rolled out, we can move on and focus on important topics like how to make money and what new use cases will be served by 5G, etc.


Other news on this topic:

• Etisalat, Ooredoo and STC launch 5G so early no one can use it - Disruptive Asia
• Middle East giants jostle for 5G-first status - Mobile World Live

India: Disruption and Competition

I have previously written about the disruptioncaused by Reliance Jio since its explosive entry into the Indian mobile market. This operator launched their 4G service in September 2016 and continues to go from strength to strength as it adds subscribers and reported a second consecutive quarterly profit and earnings of INR7.23 billion ($108 million) for its full financial year 2017-2018.

Its mobile subscriber base rose by 83 million year-on-year to take its total to 187 million at end-March 2018. ARPU dropped 11 per cent sequentially to INR137 in the January-March period. Average data consumption per user per month hit 9.7GB, which the company said was the highest in India and one of the highest in the world. Average video consumption per user per month was 13.8 hours.

Data from GSMA Intelligence show Jio’s market share rose to 14 per cent at end-March 2018, from 9 per cent a year earlier. Mukesh Ambani, chairman of Jio’s parent Reliance Industries, said:

 “A full-blown social, mobile and digital revolution is underway across the world, and I am glad that India is not being left behind in any way. Everyone at Jio is today proud to have played a pivotal role in transforming the digital landscape of this country and empowering millions of Indians with all the leading digital tools and skills.”

He emphasized the strong financial results in a competitive market environment demonstrates the robustness of their business model.

According to Open Signal Jio continued to dominate the 4G availability metric as testers were able to access an LTE signal 96.4% of the time. Such a score is exceptional, reflecting Jio's commitment to build out a 4G-only network without 3G mobile data services to fall back on. What's more, Jio's impressive LTE reach is only improving, though incrementally. The last India report in October, measured Jio's 4G availability at 95.6%.

However the success of Jio has come at the expense of others especially the ill-fated Reliance Communications (RCom) owned by the junior Ambani brother Anil,  which is heading towards a complete exit from India’s mobile sector, ending its 16-year stay in the market. The operator is folding, with a debt load standing at roughly $7 billion.

After striking a deal to sell wireless assets to Reliance Jio in 2017, which was given the go-ahead by Indian courts within the past fortnight, the debt-ridden operator was expected to remain in the market with the creation of a “new Reliance Communications”, using its remaining fixed-line and wholesale assets to serve enterprise clients.

But, just as the company looks set to complete its sale to Jio and put its B2B plans in motion, reports suggest Ambani junior is now looking to sell RCom’s remaining enterprise and wholesale assets.

Ironically by acquiring RCom’s infrastructure and assets, which in effect saved RCom from insolvency, Jio is expected to step up the competition even further with market leader Bharti Airtel and the proposed Vodafone India, Idea Cellular joint entity.

Speaking to Mobile World Live, Satyajit Sinha, research analyst IoT and mobility at Counterpoint Research, described Jio’s entry into the Indian market as a “death knell for RCom”, but noted problems started long before Anil’s older brother Mukesh stormed the Indian market with reduced data and voice offers through Jio. According to Sinha:

“RCom’s main business model was dependent upon the CDMA technology well suited for voice services, but not so for advanced data services compared to the competition which were on the path to 4G. A lack of flexibility meant the transition from CDMA to GSM was not as smooth and was a setback as Reliance continued to lose subscribers to the likes of Vodafone, Idea and Airtel.”

Finally, Sinha noted a “lack of strategic network evolution vision in addition to a lack of scale has driven RCom to this stage”.

RCom’s situation could have been very different, had Anil been allowed to proceed with a merger with South Africa’s MTN almost nine years ago. However, Senior Ambani had blocked the deal. And nine years later, he has been on hand to put the final nail in the coffin of his brother’s mobile business, as part of a wider quest to seize market domination. Family rivalry in action. 

Meanwhile, market leader Bharti Airtel reported a profit drop of 77.8 per cent in its fiscal Q4 2017, as the company continued to feel the effects of the Jio disruption/ increased competition in India which has led to an intense price war.

In an earnings statement for the quarter ending 31 March 2018, Gopal Vittal, MD and CEO of India and South Asia suggested poor performance was due to: 

 “below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in international termination rates.” 

The operator reported net income of INR830 million ($12.5 million), a sharp fall from INR3.73 billion in the same quarter year prior. Revenue dropped 10.5 per cent to INR196.34 billion from INR219.35 billion, which was attributed to the termination rate cuts.

Airtel’s profit drop is its largest in 15 years, Despite the decline, the operator’s mobile subscriber base grew 4.9 per cent to more than 304 million, contributing to an overall customer base of more than 413 million.

According to Open Signal Airtel demonstrated by far the biggest improvement in 4G reach, boosting its 4G availability by more than 9 percentage points to 66.8% in their measurements. But Airtel was also the furthest behind in this metric six months ago, so its recent surge in availability didn't propel it ahead of any of its competitors in the rankings. 

Meanwhile Idea, an operator with a 17 per cent market shareby subscribers, suffered a net loss of INR41.4 billion ($620 million) in the year to end-March, compared with an INR4.04 billion loss in fiscal 2017. Total revenue dropped 20.5 per cent year-on-year to INR283 billion.

Total mobile subscribers increased by 5 million year-on-year to 194.5 million at end-March.

Capex for the fiscal year hit INR70 billion, in line with its guidance. The operator added 45,000 3G and 4G sites to take the total to 155,000 at end-March.

The company is to due merge with Vodafone India and is in the final leg of regulatory approvals, expected to be completed in the first half of this year. The operators are already sharing about 49,000 mobile sites and plan to share fibre and points-of-presence in 220 cities.The merger, may well create a new market leader in India, however it is being speculated around 5,000 staff could be made redundant over the coming months as the companies prepare to reduce costs and streamline operations. Idea has about 11,000 employees: Vodafone India around 10,000. 

Finally State-run telco Bharat Sanchar Nigam Limited (BSNL) is expected to soon get 5 Mhz slot in the 2100 Mhz band for rolling out fourth-generation or 4G services that may make India’s telecom landscape more competitive with rivals such as Reliance Jio, Bharti Airtel, Vodafone India and Idea Cellular already pitting against each other.BSNL chairman Anupam Shrivastava told ETTelecom.

“By next month, 5 Mhz in the 2100 Mhz band will come across 21 licensed service areas except for Rajasthan where we aim to launch 4G services on the 800 Mhz band radio waves,” 

The state-driven telco is currently offering third-generation (3G) technology-based services on the 2100 Mhz band spectrum which it wants to further use optimally for 4G-based voice and data services. According to Shrivastava: 

“By rolling out 4G with an additional five units in the 2100 Mhz band can also help in utilization of unused spectrum offering contiguity,” 

Therefore they can offer 2G, 3G and 4G services concurrently.

Once more the disruptive foray of Reliance Jio in September 2016, on the back of freebies has led incumbents such as market-leader Bharti Airtel, Vodafone India and Idea Cellular to drastically cut per Gigabyte (GB) data cost or as low as Rs 5 per GB with virtually free voice calls across prepaid and postpaid platforms today.

So its seems market competition will get even fiercer. 

Lycamobile: World's largest International MVNO?

Chances are that you have heard about Lycamobile, either for their cheap local and international call rates or because of some wrong reasons for which they have been in the news recently. They claim to be world's largest International MVNO, which is most likely true as I can't think of any other competitor this big.

There are quite a few different companies in Lycamobile group as can be seen above. More details are on the group website here.

They also have a presence in 23 countries, up from 16 countries back in 2013.

In addition, Lyca group has a whole range of other companies, including Lyca production which is involved in producing movies. More info on Wikipedia here.

Finally, the picture below is a slide from Mobile World Congress 2018, showing the reach of Lycamobile.

Further Reading:

• MNO, MVNO, MVNA, MVNE: Different types of mobile operators

The Global Reach of Hutchison / '3' Group Mobile Telecom Companies

I am a big fan of 'The Mobile Network' Magazine (hereafter TMN) as it has a very well designed layout and very well thought of content. I always learn quite a few things from each issue. Hence when I saw the last one had an article on the mobile operator '3', I got in touch to get a PDF copy to share (please follow SlideShare embed below to download).

I would recommend everyone to subscribe to get their own physical or soft copy of TMN magazine. To receive your own copies of TMN Quarterly, sign up here: http://the-mobile-network.com/publications/#publications-form

While I was aware of the '3' group, I wasn't aware that the parent company Hutchison had some other brands too. In addition, I was surprised to find out that the group also has a MVNE (learn more about the difference between MNO, MVNO, MVNA & MVNE here)

For those who prefer maps, here is a global footprint of Hutchison Three companies. While most companies operate with a 'Three' brand there are a few that operate under different brand names. The most shocking being Vodafone Australia which is actually a joint venture between Vodafone and Hutchison Telecoms

Anyway, here is the article:

Three times a winner? - TMN Magazine Issue #20 from 3G4G

Further Reading:

• Different Types of Mobile Operators