BOI sees telecommunications growth fuelling radical changes in Sri Lanka’s economic landscape

Thursday, 6 March 2014 00:40 - - {{hitsCtrl.values.hits}}

The telecommunication sector is a key element in Sri Lanka’s development plans to emerge as an important regional hub in the maritime, aviation, energy, knowledge, commercial and tourism sectors. Telecommunications are therefore a vital sector that the BOI has targeted since it is central to the economy, being connected to all the other areas of economic activity. The policy of the Government of Sri Lanka is reflected in the ‘Mahinda Chinthana,’ the economic and social blueprint for the country. Facilities will be also provided to streamline the services offered by the public administration structure of the country, utilising telecommunication and Information Technology. A network of infrastructure facilities will put on place to facilitate the utilisation of telecommunication services and IT services.

Liberalised telecommunication market Sri Lanka has a liberalised telecommunication market which has a huge impact on economic and social development of the country. The telecommunications sector is well developed and considered by some experts as South Asia’s most advanced telecom industry. This is because new technologies which offer the public a faster service have been introduced in the country and also the island is well connected by fibre optic cables. An advanced telecommunications industry is necessary for a country which is opened and indeed an integral part of the global economy. It will also help the country develop her tourism industry, impacting favourably on the future plans to achieving 2.5 million arrivals by 2015. For the BOI, telecommunications, which is identified at present as part of the infrastructure sector, is one of the Board’s most important target sectors, representing a cumulative investment of US$ 3.7 billion in 2013. Sri Lanka’s main investors Sri Lanka’s main investors in the telecommunication sector are Malaysia, the UAE, China, the Netherlands, India, Hong Kong and Singapore. Through these investments, the Sri Lankan population has benefited considerably through foreign exchange earnings, creation of new employment opportunities and also the technical how that has been brought into the country. What is clear is that thanks to their investments through the BOI, the telecommunication industry has transformed the landscape of Sri Lanka both economically and socially. In the past landlines were very difficult to obtain and the waiting list was very long, but today any private citizen has access to a mobile phone. In fact, mobile phones subscriptions represent a staggering 20 million compared to a mere 2.7 million landline subscribers. What this really means that a significant number of citizens of Sri Lanka does own a mobile phone with which he or she can communicate or use as a tool for doing business. As a result of this high level of mobile penetration in Sri Lanka, there is an immense potential to exploit this opportunity in favour of the country’s growth. When it is used by the financial sector, it saves a large amount of man hours as well as offering a secure service. At the same time mobile penetration can be used to uplift the living standards of the rural people. Through mobile applications the farmers can be educated on market price trends. This will limit the involvement of middlemen in the business and make the individual farmers more financially viable. All these automations will change the landscape of Sri Lanka and promote her as a commercial hub. Impact of the internet in Sri Lanka The internet is another significant aspect of telecommunication. It has transformed our society radically and added to our lives a new dimension with seemingly endless possibilities. The number of internet users in Sri Lanka has grown rapidly since it emerged in the late 1990s. Internet penetration reached 6.7% in 2012 from 4% in 2011. Though internet penetration remained as a single digit, there was a high growth of 66% in penetration level compared to previous year. The importance of the internet as a strategic tool is a factor in determining customer loyalty. The information revolution which has been made possible through internet is vital to the country. No company can escape from its effects. It has changed the way business is done. It has led to creating a global village through the provision of a vast pool of information and the expansion of e-commerce. As well it may also emerge in future as the means by which Sri Lanka will bridge the technological gap. Sri Lanka can access research and knowledge from all over the world through the internet. This will create vast improvements in the efficiency of all the economic activities across a wide variety of sectors.