Sri Lanka's government expands telecoms connectivity in urban and rural areas

Already at the forefront of digital innovation, and boasting internet penetration rates much higher than those of its regional neighbours, Sri Lanka is slated to become the first country with universal broadband coverage, as a result of a government initiative to provide internet services nationwide, in addition to a highly publicised partnership with tech giant Google. Although these services will not be provided free of charge, and some stakeholders have questioned the necessity of high-speed broadband in remote rural areas, the move towards universal internet coverage bodes well for technological development in the country, and provides a number of significant knock-on benefits which could help foreign investment expand beyond the mainstay Colombo region.

Broadband Rising

Following the January 2015 presidential election, President Maithripala Sirisena unveiled an ambitious 100-day development plan, which included the goal of extending free Wi-Fi access to public spaces in urban cores across the country. There is certainly room for improvement at present. The country was home to just 630,000 fixed broadband subscribers as of the end of 2015, largely focused around Colombo, according to data released by the Telecommunications Regulatory Commission of Sri Lanka (TRC). These numbers have begun to stagnate and have been overtaken by mobile broadband penetration reaching 38% in 2015, 90% of which are covered by 3G connections. Between Dialog and Mobitel, fewer than 1m Sri Lankans are covered by 4G technology.

The Information and Communication Technology Authority (ICTA) has been tasked to deliver the government’s universal access undertaking, announcing in early 2015 that initiatives will include equipping 3500 government buildings with Wi-Fi internet at speeds of up to 100 Mbps, reducing existing internet costs by 50% and improving productivity by up to 200%. Falling under the purview of the government’s e-citizens’ project, this initiative joins an even more ambitious effort to launch 10,000 free Wi-Fi hotspots across the island.

Private Sector Opportunities

In order to reach its coverage targets, the government has joined forces with the private sector to expand both broadband penetration and quality of service, with new offerings increasingly geared towards rural and low-income residents.

In June 2015, for example, incumbent operator Sri Lanka Telecom (SLT), which launched the government’s National Broadband Network, a nationwide fibre-optic backbone, in November 2014, announced it would deploy island-wide carrier-grade Wi-Fi services, in partnership with equipment manufacturer Ruckus Wireless and vendor Alepo, to deliver internet services to under served rural areas. The announcement came after successful completion of interoperability tests earlier that year, with SLT moving to bolster its ADSL data service offerings to both pre- and post-paid customers, as well as casual and one-time customers.

Using Ruckus’ ZoneFlex indoor and outdoor access points, which will be centrally managed via two Ruckus SmartCell Gateways operating on Alepo’s BSS/OSS software, SLT will introduce a host of services targeting lower income rural consumers such as prepaid single-use services, in addition to bundled subscriptions for existing broadband customers, automated offload for mobile users, and partnerships with various external providers in the areas of roaming and wholesale services.

Other operators have moved forward with their own infrastructure investments in a bid to expand broadband coverage. Etisalat, for example, announced in December 2014 that it planned to expand 2G and 3G coverage via deployment of 200 new base stations across eight districts in the country in just 100 days. At the time, the country’s third-largest mobile operator boasted 70% nationwide 3G coverage, according to global telecommunications research firm TeleGeography.

Rural Coverage

Initiatives to expand rural coverage, meanwhile, got a boost in April 2015, when Sirisena launched the “Free Wi-Fi for Regional Towns” programme, which will provide up to 100 MB of free data per citizen per day. Spearheaded by the TRC, the programme will initially roll out across 100 towns across the country, after which service will expand to rural areas not covered by the first phase. To this end, the TRC has partnered with private internet service providers, which reportedly told TRC officials that they will bear the extra cost, although citizens exceeding 100 MB of usage per day will pay extra, while each user will be required to register with an internet service providers (ISPs) prior to receiving free services. In July 2015, the government announced it had closed tenders for four new national IT projects, including the scheme to deliver Wi-Fi to government buildings, a project to build a 100 Gbps fibre backbone across 25 districts, the Lanka Government Cloud Platform (see IT overview), and a new one-petabyte storage centre. The projects will cost an estimated LKR4bn ($28.8m), while an additional 10 national IT projects in the pipeline are expected to cost LKR5bn ($36m), according to local newspaper the Daily Mirror.

Project Loon

Perhaps the most significant development in the push for universal internet access came in July 2015, when Google announced it had signed a memorandum of understanding (MoU) with the ICTA to launch Project Loon, which uses high-altitude balloons to provide Wi-Fi across the island, aiming to make it the first country in the world to achieve universal internet coverage.

Project Loon involves floating enormous helium-filled balloons to the upper stratosphere, where they are able to receive Wi-Fi signals from grounded stations on earth. The signals are bounced from balloon to balloon, transmitting the signal across a 40-km range, and allowing connections via smartphones and other mobile devices. The balloons are constructed from two layers of polyethylene plastic, with solar panels attached on the lower end to help track and control each flight path.

One balloon is able to cover up to 5000 sq feet in Sri Lanka, according to Google’s vice-president and Project Loon leader, Mike Cassidy. Originally unveiled in 2013 under the mandate to provide “balloon-powered internet for everyone,” Project Loon has already been tested in the US, Australia, New Zealand and Brazil, although Sri Lanka will be the first country in which balloon-powered internet reaches commercial launch.

Under the agreement the company signed with the government, Google will begin testing in early 2016, with trials lasting as long as a year. The location and trajectory of each balloon will be tracked by Google, and although pilot tests in New Zealand found that balloons will need to be replaced every 115 days on average, local ISPs will be granted access to Google’s balloons, which will help keep costs under control.

True Cost

The MoU signed between Google and the government was for a commercial deployment, with Google planning to engage in discussions with local mobile operators to discuss revenue-sharing agreements for the provision of services. In February 2015 it was reported that the government would take a 25% stake in the project in return for allocating spectrum. A further 10% would be offered to an ISP operating on the island.

The provision of 4G or LTE internet will trigger a significant reduction in both data and voice charges across the country, and simultaneously double broadband speeds. The International Telecommunications Union reported in 2011 that doubling a country’s broadband speed can add up to 0.3% to annual GDP, while SLT projects that a 10% increase in broadband penetration will lead to 1.4% increase in GDP, so the knock-on economic benefits are significant. However, some stakeholders have also questioned whether these benefits will truly be realised among low-income rural residents lacking access to the supporting infrastructure and equipment necessary. “Project Loon is an experiment. Initiatives like this can’t be directly written off, and we haven’t done a survey about it in Sri Lanka, but in Myanmar rural residents told us they don’t want high-speed broadband. We consider broadband to be an ecosystem which requires skilled users, handsets, apps and terminals,” Rohan Samarajiva, founding chairman of Colombo-based regional think tank LRNE Asia, told OBG. “Certainly the country should have the ability to get a broadband signal anywhere, but we need to push domestic backhaul networks out, as they’re quite far in at the moment, and not shared by the incumbent, which makes prices quite high.”