Sri Lankan mobile market overcrowded

he Sri Lankan mobile phone market is “overcrowed” and ready for consolidation as intensifying competition is eroding profitability, according to Fitch Ratings. The ratings agency expects competition among operators to remain high throughout this year, the Lanka Business Online reports. “Subscriber acquisition and retention costs are likely to keep operators’ profitability under pressure over the medium-term, as subscriber growth in both the mobile and fixed segments has slowed,” the report further said. Some consolidation among operators is likely to prove healthy for the industry. Three large operators – Dialog, Mobitel, and Etisalat, control around 82 percent of the subscriber market at the end of last year. The two later entrants – Hutchison Telecommunications Lanka and Bharti Airtel Lanka – with “weak economies of scale”, according to Fitch. Although the floor tariff imposed by the regulator ended the price war among operators, the cut-throat competition could re-emerge if floor tariffs are lowered as the government said it intends to do.

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