‘Reliable digital connectivity will boost e-commerce’ | Page 2 | Sunday Observer

‘Reliable digital connectivity will boost e-commerce’

Thirukumar Nadarasa
Thirukumar Nadarasa

The mobile market in Sri Lanka is saturated with penetration over 100 percent of the population. However, this is for voice services. Mobile broadband penetration in the country is still under 40 percent, but growing rapidly. The new demand for mobile internet has to be satisfied by mobile operators, Hutchison Telecommunications Lanka (Pvt) Ltd (HTLL) CEO Thirukumar Nadarasa said.

The government should continue to free more broadband spectrum to enable mobile operators to continue supporting growth in broadband data. Else, the consequences would be congested slow broadband networks retarding the development of e-commerce and other ICT-linked industries which could contribute much to GDP growth, he said in an interview with Business Observer.

Talking about Hutchison’s recent decision to merge with Etisalat, Nadarasa said, the formal process is estimated to take four to five months to complete at which time Etisalat will be absorbed into HTLL.

Excerpts:

Q. How do you plan to complete the merger over the next six months?

A. Although the government has given approval for HTLL and Etisalat to merge, there is a standard corporate process that has to be followed when any two corporate entities merge. This process will take four to five months to complete at which time Etisalat will be absorbed into HTLL, and Etisalat will cease to exist as a corporate entity.

CKHH, our parent company will own 85 percent of the new HTLL. Etisalat UAE will own a 15 percent stake in the new company.

Q. What are the major technological upgrades you plan to install during or after the process?

A. The merger gives HTLL the scale to make major investments in new technology.

A new 4G nationwide network will be deployed on the combined tower sites of the merged entity. 4G is the latest technology in the industry enabling the network to offer advanced VoLTE services.

Additional broadband data capacity will be offered by combining the 3G equipment of the two companies into a larger unified nationwide 3G network with wider coverage and added data capacity.

We believe this is important because a large percentage of mobile subscribers still have 3G only phones which cannot use the 4G network.

Q. The telecommunication industry has changed significantly over the past couple of years by way of revenue making. What plans do you have to make the new company financially viable?

A. The mobile market in Sri Lanka has indeed become saturated with mobile penetration well over 100% of the population today.

However, this is for voice services. Mobile broadband penetration in Sri Lanka is still under 40% but growing rapidly. This new demand in mobile Internet that has to be satisfied by all the mobile operators.

However, it should be recognised that a mobile Internet business is very different to a mobile voice business and our businesses must be restructured to be financially viable on future broadband internet growth alone.

Q. How do you plan to pass these benefits to the customers? (Users complain about high data charges in the market at present)

A. HTLL has been in the mobile broadband business ever since we launched 3G services in 2012. Over the past few years, HTLL has become the brand that champions the consumer and hence we feel their pain. Therefore, Hutch has carefully tailored the widest range of affordable internet products that suits the different segments of the market.

I believe Hutch subscribers are quite satisfied with our affordable rates. However, there may be some historical anomalies in the wider industry that is prompting some subscribers to complain.

Q. How do you look at the mobile market and its ability to help entrepreneurs?

A. The mobile broadband network stretching across the nation is the new digital highway for our population including aspiring entrepreneurs. This digital highway connects not only the nation but the whole world to these entrepreneurs.

Q. What support do you plan to extend in developing the entrepreneurship culture in Sri Lanka?

A. As I said before, build a road and allow people to bring their produce to the market to earn a living.

This is precisely what Hutch is doing by building the digital highway that will offer accessible, affordable and reliable digital connectivity to potential entrepreneurs across the country not merely the main urban centres.

We believe there is a new world out there that needs new ways of doing things. Our role is to facilitate thinkers and doers to do it better, do it differently and most cost effectively.

Sri Lanka has a highly educated and literate young population with good knowledge in ICT. We will provide the digital road to allow Sri Lankan entrepreneurs to develop and take their digital products to the world.

Q. What plans do you have to support e-commerce in Sri Lanka? What opportunities do you have in this sector?

A. e-commerce encompasses all commerce in digital form covering a multitude of industries and service sectors.

HTLL is a specialised network infrastructure provider very much like an expressway operator.

We will ensure that e-commerce development across the nation will have at its disposal an accessible, affordable and reliable digital connectivity to enable e-commerce to grow.Without such digital connectivity, e-commerce can never develop and grow.

Sri Lankan consumers are adapting and embracing e-commerce slowly but surely and today, their business contribution is substantial.

Q. What kind of infrastructure should Sri Lanka develop to build applications to exploit 5G technology?

A. It was a major change when we evolved from voice to broadband data starting with 3G.

When it comes to broadband technology, however, there is no significant change as we evolved from 3G to 4G and 5G in the future. The difference is primarily in speed and capacity of the broadband networks.

However, not all applications really need 5G. There are some applications that operate perfectly well on 3G speeds. Similarly there are other applications that can operate well on 4G speeds alone.

5G will be for future advanced applications (such as self-driving vehicles) that really need 5G speed and lower latency and most importantly can afford it as there is a significant added cost in providing 5G. There, however, will be applications that will never need 4G or even 5G abilities.

Today, there is yet no case for incremental benefits by investing in 5G over the benefits already offered in 4G.

There may be in the future. However, it should be noted that today 4G broadband services are offered at the same tariffs as 3G broadband services with no additional premium for the advanced 4G benefits.

For me, the biggest benefit of 4G and 5G in the future is the huge additional broadband data capacity that will be available to support the future exponential growth in data use.

Q. What policy changes will benefit the mobile industry?

A. The liberal light touch adopted by the regulatory authorities here, over the past 20 years, has delivered the lowest cost but quality mobile services in the South Asian region.

Broadband growth of the future needs adequate and significant allocations of broadband capable spectrum to support the huge investments needed in 4G and future 5G, to achieve cost efficiencies to allow operators to continue to offer affordable data and capacities needed to support rapid broadband growth.

The recent merger of Hutch and Etisalat leaves one less player in the mobile industry to demand its share of scarce spectrum of resources.

It is critical that the government continues to free more broadband spectrum to enable mobile operators to continue supporting the exponential growth in broadband data anticipated in the future. Else the consequences would be highly congested, slow broadband networks retarding the development of e-commerce and other ICT-linked industries which could contribute much to future GDP growth.

Q. Our young generation is mobile savvy. They have basically grown up with mobile technology. What is their future with mobile technology?

A. Mobile technology is their future. Today parents complain that their children spend too much time on the mobile phone. In the past watching TV, reading a book or news, listening to music, playing games, seeing/communicating with friends were separate discrete activities. However, today all this is happening on a mobile phone.

The mobile phone has now become the single portal of life for the young generation and could also be their source of development and future employment opportunities as well, with commerce becoming increasingly digitised.

This portal will offer unlimited global opportunities to the young generation and we mobile operators must ensure they have the best access to it.

Q. How optimistic are you about growing within the mobile industry in Sri Lanka in the next 2-3 years?

A. I am very optimistic about the growth of the mobile broadband industry over the next 2-3 years as the industry will have to work hard to keep pace with the exponential future demand for data.

The mobile industry will not need to worry about demand for its broadband services nor will it need to compete against other mobile operators for market share as the size of the overall broadband data market will grow rapidly and operators will have to focus on ensuring their networks are ready to cope with this future data deluge - this will be the real challenge for the mobile industry over the next 2-3 years.

Hutch is Sri Lanka’s fastest growing mobile broadband operator with 2G/3G coverage across the 25 districts. Our nationwide 4G network rollout has commenced with the Western Province being covered and plans are afoot to cover the rest of the country by the end of this year.

Hutchison Telecommunications Lanka (Pvt) Ltd. (Hutchison Telecom Lanka) launched its GSM service in 2004. As a member of Hutchison Asia Telecom, our abilities derive from being a part of CK Hutchison Holdings Limited.CK Hutchison Holdings is a Fortune 500 global corporate giant. Listed on The Stock Exchange of Hong Kong Limited, CK Hutchison Holdings Limited (CK Hutchison) is a renowned multinational conglomerate committed to innovation and technology with businesses spanning the globe.

With operations in over 50 countries and over 290,000 employees worldwide, CK Hutchison has five core businesses – Ports and related services, retail, infrastructure, energy and telecommunication.

Hutchison Asia Telecom’s mobile telecommunication operations span across the emerging markets of Indonesia, Vietnam and Sri Lanka. CK Hutchison Holdings’ telecommunications division which includes the three Groups, comprises mobile broadband operations in Australia, Austria, Denmark, Hong Kong, Ireland, Italy, Macau, Sweden and the UK

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