Dialog Axiata, Sri Lanka’s largest mobile operator, plans to reduce data prices and expand into the fixed-line broadband market after jointly investing in the Bay of Bengal Gateway (BBG) submarine cable with five foreign operators.
Dialog said the BBG cable, in which it invested $34.5 million, will enable it to offer data at a much lower price than its competitors, Mirror Business reported.
Before the new cable came online, all operators had to buy bandwidth at high prices from state-run Sri Lanka Telecom (SLT) and fixed-line operator LankaBell, with just three cables connecting the country to the global fixed backbone — SLT owns two while LankaBell owns the third.
Ruchira Yasarathna, Dialog’s head of network and service assurance, told the newspaper that while Dialog will reduce mobile data prices soon, the regulator may not allow prices to match the benefit gained by the BBG cable since such price levels could hurt competition.
“Prices will be reduced because it is a mandate of the Telecommunications Regulatory Commission to reduce prices, but we will give more speed and more bandwidth for the same price, which is essentially a price reduction,” said Sanath Siriwardena, Dialog’s GM of broadband development and promotion. He noted that it doesn’t want prices to drop too drastically.
He suggested other operators can buy bandwidth from it and compete with its data prices.
Over the last year Dialog also has begun installing a fibre-optic national backbone. The country’s broadband market is controlled by SLT, whose backbone covers only about 25 per cent of the island.
Dialog and other operators are only allowed to install last-mile connections into businesses and multi-residential units such as apartments, while only STL can install last-mile connections to homes.
Dialog has a 41 per cent market share and nearly 11 million mobile customers, according to GSMA Intelligence. Yasarathna noted mobile networks will remain its main revenue stream.