Bharti Airtel loses momentum

24-Feb-2008

Delays in allocating frequencies and severe competition are main causes

By Indika Sakalasooriya
The Indian Mobile giant Bharti Airtel who succeeded in winning a license to operate in Sri Lanka as the fifth player is believed to have faced many obstacles in setting up their operations here causing frustration, industry sources revealed.

The company which got the license from the Telecommunication Regulatory Commission of Sri Lanka (TRCSL) in May last year had originally planned to roll out its operations in December or early this year. “But it seems that Bharti has lost its enthusiasm about the Sri Lankan mobile market despite mobile penetration being as low as 20 percent, due to several constraints that they had to face in Sri Lanka” a telecom analyst who wished to remain anonymous told The Nation Economist.

As he points out, although Bharti obtained the license to operate in Sri Lanka in mid last year, the TRCSL is reported to have been withholding the frequencies without releasing them to Bharti on unexplained grounds. The company is also reported to have been facing obstacles in setting up the network of towers.

Commenting on the issue, Country’s best known telecom specialist Professor Rohan Samarajeewa said that although earlier he expected that Bharti will come to Sri Lanka and ‘literally slaughter the existing players and capture the market’ now he thinks that they will be able to play relatively a minor role due to some recent developments in the Sri Lankan mobile sector.

“The current post-paid and pre-paid rates in Sri Lanka seem to be cheaper when compared to India. Therefore, there is hardly any space for Bharti to come here and sweep the existing players by offering a better rate. This may also be a discouraging factor for them to start operations in a big way, Samarajeewa said. He also said in this context, Bharti could even be contemplating on other markets which are more economically viable.

When contacted the Chairman and the Country Director of Bharti Airtel Lanka (Pvt) Ltd., Olof Haag said that he is not in a position to comment on the matter. The officials of the Indian High Commission in Sri Lanka also refused to comment, but affirmed that Bharti still has not informed them regarding any constraint they are facing.

Bharti last year won the island’s fifth mobile slot with a bid of around USD 4 million, beating nine hopefuls including its domestic rival in India Reliance Communications. The company also promised to invest USD150 million within its first year of operation and roll out commercial GSM services by the end of 2007 or early 2008.