Mobitel To Use Google To Gain Market Share Growth

Sri Lanka's second-ranked mobile operator by subscriber numbers, Mobitel, managed to gain a healthy 56.4% share of total net additions in the quarter ended June 2009. This brought its overall market share to 23.5%, an increase of 0.9 percentage points (pps) in the quarter, while over the year its share had risen by 5.8pps. Mobitel's latest offering, the use of Google services on mobiles, is expected to be popular and will help the company to expand its market share. Mobitel's performance has been impressive given the impact on the market of new entrant Bharti Airtel, which forced Hutchison Lanka into fifth place and led to a price war.

Aggressive price competition, which has affected all operators in terms of revenues, combined with the economic slowdown has led to concerns that greater consolidation in the Sri Lankan mobile industry is needed. This already appears to be occurring, with Tigo, owned by Millicom International, announcing the sale of its Sri Lankan unit. This forms part of Millicom's overall strategy to sell all of its Asian assets. Another possible sale could also emerge from Hutchison Lanka, which reported its fourth consecutive quarterly subscriber loss in June 2009, blaming it on a combination of the government's prepaid registration programme and price competition. Although Hutchison has not said it is looking to quit the Sri Lankan market, the operator completed the sale of its Israeli assets this year.

However, the cessation of hostilities with the Tamil Tigers in the Northern Province is already providing a new, untapped market for network deployments and subscriber growth. One of the first to enter the province was market leader Dialog Telekom, which deployed services in Kilinochchi and Mullaitivu, among other towns, and it will not be long before the company is joined by other rivals. Indeed, Mobitel has set aside around US$100mn over the next three years to be spent on its north and east development plans.

In the immediate term, however, operators will be focused on improving their market share. This certainly appears to be at the forefront of Mobitel's plans. Its market share remains some way behind Dialog Telekom, and the operator has actively sought to deploy attractive offerings as one way of achieving share growth. At the end of 2008, it launched its postpaid 'Uphara' tariff, which had a positive impact on subscriber growth, as it provided a tailored experience, while in August 2009, its latest offering has been to provide Google's e-mail, calendar and document reading services to its mobile subscribers. The service will be provided over its HSPA network, and already appears to have received considerable interest, with Mobitel's CEO, Suren Amarasekera, stating that in the few minutes after the service was launched, around 1,000 names had registered.

This article is tagged to:
Sector: Telecommunications
Geography: Asia, Sri Lanka

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