Sri Lanka swaps spectrum for stake in Project Loon

Sri Lanka’s government is trading dedicated spectrum for a 25% holding in the local unit of Google’s Project Loon.

The island nation’s government announced its support for the technology last July, stating that it would help to conduct tests which are due to start this month. Telecoms Minister Harin Fernando has confirmed that all required equipment – including the eponymous helium-filled weather balloons – is ready to go. The trials could last as long as a year.

Project Loon aims to deliver high-speed internet connectivity by using giant helium balloons to function as airborne mobile phone towers, floating untethered at an altitude of 20km. Major operator groups such as Telefonica, Telstra and Vodafone have participated in testing.

Fernando noted that the joint venture has the support of local ISPs as it will foster competition and thereby drive down tariffs. He added that Sri Lankan telecom operators will have the opportunity to acquire part of a 10% stake in the local joint initiative.

Sri Lanka currently has around 38% mobile broadband penetration – predominantly via 3G connections, as there are fewer than 1 million 4G users between the two operators that offer the service (Dialog Axiata and Mobitel). Almost 90% of the population is covered by 3G networks, as opposed to 44% for 4G.

In October, Google declared its balloon technology to be “almost perfected”, while announcing the project’s first partnership agreement with three Indonesian operators – Indosat, Telkomsel and XL Axiata.

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