Dialog to break into broadband fixed-line market with new cable

„„The Sri Lankan branch of the BBG submarine cable being towed to shore near Mount Lavinia from the junction of the main cable 143 kilometres off-shore. Dialog and 5 foreign telecom operators jointly invested US$ 240 million on the cable, with Dialog’s investment being US$ 34.5 million Pic by Indraratne Balasuriya

By Chandeepa Wettasinghe Just a fortnight after commencing operations on Sri Lanka’s latest submarine cable, the country’s largest mobile telecommunications operator, Dialog Axiata PLC (Dialog), is hoping to break into the broadband fixed-line market, a top official said. Currently state-controlled Sri Lanka Telecom is the sole licenceholder that can install the last mile connections into homes. “I believe that there shouldn’t be just one operator for people to choose from,” Dialog Broadband Development and Promotion General Manager Sanath Siriwardena, who is one of the foremost experts on broadband in Sri Lanka, said. Dialog and other telecom operators are only allowed to install last mile connections into businesses and multi residential units such as apartments. Over the last year Dialog has begun to install a fibre optic national backbone.

The SLT national backbone covers the 25 percent of the island which represents the most data consumption areas. The state-owned giant had requested other operators to develop the remaining 75 percent of the country’s connectivity. Siriwardena expressed confidence in capturing a larger market share, as the Bay of Bengal Gateway (BBG) submarine cable has provided Dialog with the means to price data much cheaper than its competitors

Dialog Network and Service Assurance Head Ruchira Yasarathna noted that while there may be a slight reduction in Dialog’s mobile data prices soon, the TRCSL may not allow Dialog to reduce prices to match the benefit gained by the BBG cable, as such price levels may stifle competition. “Prices will be reduced because it is a mandate of the TRCSL to reduce prices, but we will give more speed and more bandwidth—like we do at off-peak hours—for the same prices, which is essentially a price reduction. Other operators can buy bandwidth from us and compete with our prices,” Siriwardena said. Before joining Dialog, Siriwardena had spent 5 years as a consultant for the TRCSL.

He noted that Dialog doesn’t want prices to deteriorate too drastically either. Until the BBG cable came online, there were just 3 cables connecting Sri Lanka to the fixed telecommunications backbone of the world. SLT owned 2, while LankaBell owned another which piggybacked from India. All operators in Sri Lanka had to buy bandwidth from SLT and LankaBell at high prices. The 3 cables represented just over 1 terra bit per second (Tbps) in speeds.

The BBG cable represents a significant shift, accommodating 6.4 Tbps, with options to go up to 55 Tbps. Experts project global data usage to increase a thousand fold within the next 5-10 years as previously unconnected areas integrate with the digital world, and current consumers continue to demand access to more data. “The Sri Lankan government wants there to be e-governance, and we’re going more into e-commerce, so data consumption will increase, and without this type of infrastructure, we can’t go ahead,” Yasarathna said of a similar pattern emerging locally. He said that mobile networks will remain the main revenue stream for Dialog. The group commands a near 50 percent market share in the country’s 22 million mobile subscribers, which marginally exceeds the country’s population.