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PDF/Population/ P9p10%20Literacy%20Rates%20By%20District,%20Sex%20An Census and Statistics, Sri Lanka) D%20Sector.Pdf 5 Department of Census and Statistics Sri Lanka Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized i | Broadband in Sri Lanka: A Case Study ii | Broadband in Sri Lanka: A Case Study © 2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved The findings, interpretations and conclusions expressed herein are entirely those of the author(s) and do not necessarily reflect the view of infoDev, the Donors of infoDev, the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, the Board of Executive Directors of the World Bank or the governments they represent. The World Bank cannot guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to infoDev Communications & Publications Department; 2121 Pennsylvania Avenue, NW; Mailstop F 5P-503, Washington, D.C. 20433, USA; telephone 202-458-4070; Internet: www.infodev.org; E-mail: [email protected]. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, D.C. 20433, USA; fax: 202-522-2422; e-mail: [email protected]. Cover design by infoDev To cite this publication: Galpaya, Helani, 2011. Broadband in Sri Lanka: Glass Half Full or Half Empty?. Washington, D.C: infoDev / World Bank. Available at http://www.broadband-toolkit.org/. iii | Broadband in Sri Lanka: A Case Study Table of Contents List of Tables and Figures ……………………………... vi List of Acronyms ……………………………... vii Acknowledgments ……………………………... viii 1. Executive Summary ……………………………... 1 2. Socioeconomic Overview ……………………………... 3 3. The ICT Sector ……………………………... 5 3.1 Regulatory and policy institutions and ……………………………... 5 instruments 3.1.1 ICT policy ……………………………... 5 3.1.2 The regulator ……………………………... 5 3.1.3 The ICT agency ……………………………... 7 3.2 Size and importance of the ICT sector ……………………………... 7 3.3 Operators and services ……………………………... 8 4. The Broadband Sector ……………………………... 10 4.1 Retail broadband ……………………………... 10 4.2 Wholesale infrastructure ……………………………... 10 4.2.1 In-country backbone infrastructure ……………………………... 10 4.2.2 International connectivity ……………………………... 12 4.2.3 Internet Exchange ……………………………... 13 4.3 Penetration of broadband ……………………………... 13 4.4 Retail broadband prices ……………………………... 15 5. Driving the Demand for Broadband ……………………………... 18 5.1 Public access ……………………………... 18 5.2 Digital literacy ……………………………... 20 5.3 Converged and bundled offerings ……………………………... 21 5.4 Content and applications ……………………………... 22 5.4.1 Browsing habits of users ……………………………... 23 5.4.2 E-government applications ……………………………... 23 5.4.3 Emergence of ―App Store‖ model ……………………………... 24 5.4.4 Online payments ……………………………... 25 5.5 Regulatory measures to protect the ……………………………... 25 consumer 5.5.1 Online security ……………………………... 25 5.5.2 Broadband quality ……………………………... 26 6. Assessing Performance: Glass Half ……………………………... 28 Full or Half Empty? 6.1 What worked ……………………………... 28 6.1.1 Early availability of 3G spectrum ……………………………... 28 iv | Broadband in Sri Lanka: A Case Study 6.1.2 Innovations by operators ……………………………... 28 6.1.3 Creating the ecosystem: e-Sri Lanka ……………………………... 29 6.1.4 Tax relief ……………………………... 29 6.2 Challenges ……………………………... 29 6.2.1 Reaching the mass market ……………………………... 29 6.2.2 The language barrier ……………………………... 30 6.2.3 Regulating broadband quality ……………………………... 31 6.2.4 Special dispensation for the telecom ……………………………... 32 sector 6.3 Has Sri Lanka achieved enough, given ……………………………... 32 favorable conditions? 7. Lessons Learned ……………………………... 33 v | Broadband in Sri Lanka: A Case Study List of Tables and Figures Figures Figure 1: Province, District and DS division boundaries of Sri Lanka ……………………………... 3 Figure 2: Sri Lanka GDP composition by sector, 2004-2009 ……………………………... 4 Figure 3: e-Sri Lanka program components ……………………………... 6 Figure 4: Total cost of ownership, mobile services including data, USD, ……………………………... 9 2010 Figure 5: Tail-link cost for 2Mbps backhaul in South Asia, USD ……………………………... 11 Figure 6: Proposed route for the NBN ……………………………... 12 Figure 7: Mobile and fixed broadband subscriptions per 100 people, ……………………………... 16 South Asia, 2010 Figure 8: Sri Lanka’s network readiness, 2009 ……………………………... 18 Figure 9: Internet users, Sri Lanka, 2004-2009 and selected lower ……………………………... 19 middle-income economies, 2009 Figure 10: Services provided by various types of government ……………………………... 23 organizations Figure 11: Mobile broadband speed tests, Sri Lanka, January 2011 ……………………………... 26 Figure 12: Actual download speeds (kbps) per USD, 2009 ……………………………... 31 Tables Table 1: Major telecom operators in Sri Lanka ……………………………... 9 Table 2: Broadband market and operators in Sri Lanka, March ……………………………... 10 2011 Table 3: International Internet connectivity, South Asia ……………………………... 13 Table 4: Fixed and mobile broadband subscriptions, Sri Lanka, ……………………………... 14 2010 Table 5: Year-over-year growth of mobile connections by speed ……………………………... 15 Table 6: Monthly broadband packages, Sri Lanka, USD, ……………………………... 17 February 2011 Table 7: Entry level 3G prices, South Asia, USD, March 2011 ……………………………... 17 Table 8: Top 20 web sites in Sri Lanka, March 2011 ……………………………... 22 vi | Broadband in Sri Lanka: A Case Study List of Acronyms 3G Third Generation ADSL Asymmetric Digital Subscriber Line BPO Business Process Outsourcing CAGR Compound Annual Growth Rate CDMA Code Division Multiple Access DCS Department of Census and Statistics, Sri Lanka DS Divisional Secretariat (a unit of government administration) EBITDA Earnings Before Interest, Tax, Depreciation and Amortization FDI Foreign Direct Investment GDP Gross Domestic Product GPRS General Packet Radio Service GoSL Government of Sri Lanka HSPA High Speed Packet Access ICT Information and Communication Technology ICTA Information and Communication Technology Agency of Sri Lanka IT Information Technology ITeS Information Technology Enabled Services IX Internet Exchange Kbps Kilo bits per second LEARN Lanka Education and Research Network LKR Sri Lankan Rupees (Rs.) Mbps Mega bits per second NBN National Broadband Network NGN Next Generation Network SIM Subscriber Identity Module SLT Sri Lanka Telecom Tbps Terra bits per second TCO Total Cost of Ownership TRCSL Telecom Regulatory Commission of Sri Lanka USD United States Dollars (US$) WCDMA Wideband Code Division Multiple Access WiMAX Worldwide Interoperability for Microwave Access vii | Broadband in Sri Lanka: A Case Study Acknowledgments This report was drafted by Helani Galpaya of LIRNEasia, with significant contributions by Michael Minges, who directed the case studies for the Broadband Strategies Toolkit. The project was carried out under the supervision of Tim Kelly (infoDev) and Carlo Rossotto (ICT Sector Unit), with the Telecommunications Management Group Inc. (USA) providing overall project coordination. Philippe Dongier, Sector Manager (ICT Sector Unit) and Valerie D’Costa, Program Manager (infoDev), provide overall management guidance for the development of the toolkit. Samhir Vasdev edited the report and prepared it for publication. This case study is one of an initial series of seven that will contribute to the Broadband Strategies Toolkit, an online resource for policy-makers and regulators, especially in developing countries (see www.broadband- toolkit.org). The case studies are generously funded by the Korean Trust Fund (KTF) on Information and Communications for Development (IC4D). The KTF is a partnership between the government of the Republic of Korea and the World Bank Group whose purpose is to advance the ICT4D agenda to contribute to growth and reduce poverty in developing countries. viii | Broadband in Sri Lanka: A Case Study 1. Executive Summary Sri Lanka, an island nation located in the Indian minutes of use per user enabled operators to make Ocean just south of India, has lately experienced positive EBITDA margins even though the an explosion in the use and availability of Average Revenue per SIM was low, around USD broadband services. The increase is primarily due 2 – 5. to the high rate of adoption of third generation This budget model of telecom that was first (3G) mobile technologies such as HSPA and developed for the voice business is now being HSPA+ dongles and associated SIM cards. This applied to mobile broadband in Sri Lanka. In trend is typical of Sri Lanka and many other South particular, enabling pre-paid mobile broadband Asian countries which do not have access to wide- and allowing for very low value re-charges, the spread copper last mile connectivity, and therefore youth (who have highly variable incomes)
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