Hutch says ready to enter e-commerce space with strategic partner

• Firm eying slice of digital economy after completion of 4G rollout and merging of networks
• 4G rollout expected to be completed this year to cover 90% of SL’s population

By Nishel Fernando

Hutch Telecommunications Lanka (Pvt.) Ltd, a subsidiary of Hong Kong-based CK Hutchison Group, is eying to enter Sri Lanka’s e-commerce sector with a strategic partner, after the completion of the islandwide 4G rollout and merging of 2G and 3G networks of Hutch and Etisalat. 

“After upgrading and merging our networks, we will be moving into e-commerce and other areas of the digital economy. We would initially like to work with a strategic partner, who has expertise in this particular area. We are looking for strategic partners to work and develop these services,”

Hutch Telecommunications Lanka (Pvt.) Ltd CEO Thirukumar Nadarasa told reporters at the telco’s high-tech hub located in Walpola, Ragama.  

Nadarasa said Hutch is accelerating its 4G rollout, which is expected to cover 90 percent of Sri Lanka’s population. 
“We are trying to accelerate the 4G rollout and finish by the end of this year, if not the first quarter of next year. We started the rollout from the Eastern Province and so far, we have covered 10 districts, completing around one-third of our 4G rollout,” he said. 

Hutch is committed to invest over US $ 200 million over the next four years, following its merger with Etisalat Lanka (Pvt.) in late 2018. 

Meanwhile, Nadarasa stressed that Hutch doesn’t want to rush into 5G in Sri Lanka, considering that the majority of Sri Lankan consumers are still reluctant even to move into 4G, due to the cost factor. “Hutchison Group is one of the most advanced telco firms in the world. 

We were the first telco to launch 3G in the world, so we are not afraid of technology. But we must make sure in every market we are providing the right service and technology that people demand.

We will reach all customers with the right packages with affordability. We have to deliver affordable broadband connections to everybody while managing the increasing traffic, that’s the challenge,” he elaborated. 

Under its investment plans, Hutch recently deployed the first fully-fledged network function virtualisation (NFV)-based core network in Sri Lanka, a technology that allows operators to move out from a traditional hardware-based system to a more generic IT server for telecommunication services.  “We are looking at about 60 percent savings in terms of capital expenditure and operational expenditure with the deployment,” a Hutch official said.

Nadarasa noted that the deployment of the fully-fledged NFV would allow Hutch to easily launch 5G services when the Sri Lankan market is ready.  

“One of the other advantages of NFV architecture is that as we are separating hardware from services; it can be easily upgraded to 5G in the future. That’s the advantage of NFV. We are not tied to 3G or 4G hardware anymore,” he said.

However, Nadarasa noted that the capacity of all four operators will be required to cater to the demands of future consumers, which would be mostly data.

“When you move into data, it’s a whole different ball game. We will see an explosion in data demand with IoT, remote sensors, remote cars and other developments. 

The combined capacity of four operators will be needed to serve to the future demand.  I don’t see competing with Dialog or Mobitel in the future. We will have to work together to satisfy the demand,” he elaborated. 

Hutch had nearly six million mobile subscribers at end-2018. The revenue of Hutch Telecommunications Lanka (Pvt.) Ltd rose by 17 percent year-on-year to HK $ 345 million in 2018.