Foreign and local firms jostle to take up fifth mobile phone license

June 30, 2006 (LBO) – More than ten foreign and local telecom operators shown interest in bidding for Sri Lanka's fifth mobile operator's licence, the island's the telecom regulator said Friday.

Bidders, which included those from Singapore, India and Malaysia, are keen to get a slot in the mobile phone market which grew over 50 percent to 3.34 million users by the end of 2005. "The response has been good, with over ten companies showing interest in the license when the deadline closed today," Telecommunications Regulatory Commission Director General, Kanchana Ratwatte told LBO. Though Ratwatte declined to confirm, Malaysia's cellular operator Maxis Communications, Singapore Telecommunications and India's Reliance Infocom are believed to among the suitors. "New licenses will be issued subject to clearance from the Defence Ministry with regards to issues like ownership, equipment and so forth," he said. Newcomers will have to pay four million dollars for the GSM1800 license, says Ratwatte, adding the TRC will shortly announce the winning bid. Telecommunications is one of the fastest growth sectors in this South Asian island of 19.5 million people and the Central Bank said Thursday that mobile connections per 100 people had risen to 19 percent from 13 percent reported a year ago. Dialog Telekom, a unit of Telekom Malaysia, dominates the landscape with over 2-million subscribers on its network. Other operators include Celltel Lanka Ltd, Hutchinson and Mobitel, a unit of fixed line giant Sri Lanka Telecom. In May, Sri Lanka invited mobile operators to set up a next generation or third generation mobile phone network, with the aim of offering high speed wireless services. Third generation or 3G licenses will be available on the 2GHz (2 GigaHertz band) and the initial spectrum allocation will be limited to existing mobile operators.

Cellular services have been growing at a blistering 50 percent each quarter in the absence of landline capacity.