 Sri Lanka: Telecoms and technology background
From the Economist Intelligence Unit
Investment in Sri Lanka’s telecommunications industry had been held up by the bitter war between the government and the Liberation Tigers of Tamil Eelam (LTTE, or Tamil Tigers), which limited the resources available for infrastructure investment in general, and undermined private-sector involvement.
However, the liberalisation of the industry that started with the part- privatisation of the state-owned telecoms monopoly in 1997, Sri Lanka Telecom (SLT), and more recently the ongoing ceasefire between the government and the LTTE, has resulted in the sector enjoying rapid growth in recent years.
Growth momentum in the telecoms sector was one of the primary factors behind a revived annual average growth rate of 7.6% (at constant factor-cost prices) in the services sector in 2003-04, and continued strong growth in the first three-quarters of 2005. Following an average growth of 12.1% year on year in 2003-04, the transport and communications sector grew by just 2.9% in the first three quarters of 2005, as the continued boost provided largely by increased investments and a rapid expansion in mobile-phone use was offset by weak growth in the transport sub sector.
The telecoms sector underwent major changes during the 1990s in terms of the subscriber network, private-sector participation, modernisation and institutional reforms. The entire telecoms sector was opened to competition with the monopoly enjoyed by SLT for international voice services and wire-line services coming to an end in August 2002. According to the Telecoms Regulatory Commission of Sri Lanka (TRCSL), at the end of February 2005 there were three fixed-asset operators and four mobile-phone operators.
Development of the information, communications and telecoms (ICT) sector is one of the priorities of the government. It has announced a new ICT strategy, “e-Sri Lanka”, for the enhancement of the sector and to promote the use of ICT.
There is only a small domestic manufacturing base of electronics goods. As a result, mobile phones, personal computers (PCs) and related products are imported. The US and Japan dominate sales of PCs, whereas mobile-phone imports are largely sourced from Europe and the US.
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SOURCE: The Economist Intelligence Unit
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