SLT and Sky Network Ltd’s WiMax deal sealed

Sri Lanka Telecom said this week that it has acquired a 75% stake in Sky Network Ltd, a licensed WiMax operator, for US$1 million to carry out WiMax services after it failed in its own bid to secure a licence. Sky Network is a company incorporated in Sri Lanka by the Lycatel Group, a Pan-European pre-paid telecom organization, to carry on operations in Sri Lanka with the aim of securing access to their wireless broad-band frequency. SLT has done field trials on WiMax Services and is awaiting frequency allocation to launch WiMax services in Sri Lanka which is a wireless broadband solution.

A senior official of the company told The Sunday Times FT that SLT had already set up a separate unit headed by a Chief Officer to handle WiMax services but it has no work at present. SLT had applied for the WiMax frequency from the Telecommunication Regulatory Commission of Sri Lanka (TRCSL) but despite repeated reminders there hasn’t been anyprogress in obtaining these frequencies, he said. TRC officials were not available for comment. Dialog Broadband and Suntel already own frequencies and they have rolled out their WiMax networks.

The official added that the time to market and ‘first mover’ advantage is very critical in this business and SLT will lag behind with the delays and become another follower in the market. He noted that the company has already developed necessary infrastructure to operate WiMAX services. Another officer said testing and deploying of a WiMAX broadband wireless solution which began in 2006 had been completed with the assistance of Aperto Networks, a developer of WiMAX base stations and subscriber units. He said he was perturbed by the delay in permission being granted to SLT to operate this service.

Lyca Group in UK which is a virtual operator in UK had approached SLT for business through its 95% owned subsidiary Sky Network, which has been given WiMax frequency to operate islandwide. SLT decided to go forward with partnership with equity acquisition of this company to launch WiMax services. According to SLT, the teaming up with Sky Network could leverage its island wide infrastructure for the provisioning of wireless broad-band applications such as IPTV, Video on Demand and Educational Services to the local market. Currently SLT uses ADSL technology for its broadband services.

The SLT board of directors said it resorted to this option as the license for its WiMax operation from TRC had seen ‘inordinate delays.’ WiMax is a high-speed, high-capacity, long-range wireless delivery system of all things digital including data, voice, and video content. It is a much more cost effective broadband technology than traditional wire-line based technologies such as ADSL and dialup lines.