Sri Lanka's telecoms market is relatively small but mature compared to neighbouring countries of Bangladesh and Pakistan.
A good start has been made on expansion and provision of supporting infrastructure for telecommunications services. The fixed line market in Sri Lanka remains underdeveloped due to the dominance of the mobile segment. Further, the number of fixed telephone lines is slowly declining as the mobile segment continues to expand. Overall penetration dropped from 16.3% in 2012 to 11.3% in 2017. The market is predicted to decline further over the next five years to 2022 as the mobile segment continues to grow for both voice and data/broadband usage.
Sri Lanka's mobile market has experienced strong growth over the last five years. By offering an effective and efficient alternative to the fixed-line networks, with their chronic problems in meeting the general demand for telephone services, the mobile phone has become an essential service and has grown strongly.
Mobile penetration has risen from 96% in 2012 to 126% in 2017. The last three years in particular have seen very strong growth led by the market leader Dialog Axiata. 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 market is now moving from 4G towards 5G mobile services. Dialog Axiata carried out a 5G' network capability trial with technology partners Ericsson and Huawei in Colombo.
The availability of e-commerce applications including mobile banking, e-bus ticketing, and mobile points of sale (POS) continues to increase.