Telco consolidation just ‘a matter of time’ : Airtel SL chief
View(s):Consolidation is inevitable for Sri Lanka’s telecommunications industry, according to industry veteran and current Airtel Sri Lanka Chief Executive Suren Goonawardene who previously headed local fixed line operator Lankabell. Adding that this pending industry consolidation would benefit both consumers and operators, he further commented that it was only a matter of time before the larger companies would acquire the smaller operators.
Speaking to the Business Times on Airtel Sri Lanka’s fifth anniversary of its local market entrance, which falls today, Mr. Goonawardene gave his personal opinion that, in hindsight, Airtel’s low price entry strategy used to enter the local market was a wrong decision by the operator. Other industry analysts said that Airtel’s entry strategy of significantly lower tariff and free SIM entry offers had sparked a domestic price war that eventually resulted in the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) stepping in and instituting tariff floor and ceiling pricing structures.
Suren Goonawardene
Mr. Goonawardene noted that it was his company’s current strategy to offer very innovative, price competitive data products, which was the way forward as far as Airtel Sri Lanka was concerned. He also indicated that the future trend for the Sri Lankan market was the offering of various types of services, coupled with data, as consumers were increasingly concerned with data.
On the other hand, he did note that, for a country’s ICT infrastructure to grow, investment and growth in networks was important and, as a result, returns were critical to promote investment by operators, so at some point tariffs would inevitably have to go up.
At the same time, he also indicated that, with regards to the Rs. 2 billion network expansion investment that Airtel Sri Lanka had made recently, the funds were used to shore up existing gaps in the network, as well as helping further stimulate Airtel’s data users.Additionally, a part of this investment would be earmarked to grow the company’s local enterprise unit. Commented Mr. Goonawardene, the company’s enterprise unit had a number of innovative products; such as technology that could even alert companies to the temperature levels in their cold storage vehicles. This level of innovation was exclusive to Airtel locally. When asked to comment about the company’s plans pertaining to mobile payments, Mr. Goonawardene revealed that “Airtel Money” was on the verge of being launched locally, and this was just pending regulatory approval. However, the infrastructure for this service was already in place. He also indicated that the company had recently pioneered Near Field Communication (NFC) technology, in conjunction with HNB, which had made it possible to pay for bus tickets, amongst other services, via the bank’s NFC-enabled Point of Sale (POS) payment machines.
Queried about Airtel’s lack of participation in the 4G (LTE) spectrum auction held mid-2013, Mr. Goonawardene stated that 4G was something that Sri Lanka was still not ready for, especially in terms of costs of devices, etc. So, Airtel did not want to be in the position of being a ‘cursed’ winner, if successful at this auction. He further signalled that Airtel would only deploy 4G at the right time, and that this was likely “in the cards” in about 18 months from now.
Highlighting the events being held to mark the company’s fifth local anniversary, Mr. Goonawardene indicated that these would include felicitating certain customers who had been loyal to the company for its full five years. Also being held was a CSR initiative in conjunction with Lady Ridgeway Hospital. This would result in an upgrade to some of the hospital’s facilities, including its Out Patient Department (OPD).