Mobilemarket in Sri Lanka is growing due to increasing use of mobiles in rural areas,lower mobile rental cost, fall in handset price, initiatives taken by the governmentetc.

Lanka Business Online reportedthat people in Sri Lanka are increasingly buying cell phones. This is good newsfor cellular operators and equipment sellers who will get a bigger market toplay and operate in.

Two biggest telecommunication equipment providers, Siemensand Nokia, collaborated in March 2007. For them, it is a very good opportunity,and they are trying to leverage from the favorable market in Sri Lanka.

SunilLakshmanasinghe, Director of the Nokia Siemens in Sri Lanka, said, “We believeby 2010, the mobile penetration will reach more than 50% and that means we arelooking at 14 Million (people) who are connected”, as reported by Lanka Business Online.

Sri Lankahas over 7 Million mobile users and over 3.5 Million landline users presently.Mobile rental costs are around a fifth of that of landline, and the handsetprices’ sharp fall has given the mobile telecommunication market an increasedsale. Mobile usage has increased even in the rural areas due to the low costfactor.

Thetelecommunications industry is one of the fastest growing sectors in Sri Lanka.This growth can be attributed to the major initiatives that have been providedby the government, and also due to the overwhelming support by the privatesector.

A 5thmobile operator, Bharati Airtel of India, was also given the license to offerservices in Sri Lanka in previous year. With a market where cell phonepenetration is little over 30%, this was a major event. Competition hasincreased, which has resulted in tariff reduction making the mobile callscheaper than that of landline sometimes.

According toa Senior Research Analyst at RNCOS , “SriLanka's mobile market has witnessed major growth in the past few years, andthere is still a significant room for growth in the market. It is expected thatmost of this growth will be determined by the addition of low-income consumers.With the right approach by the Sri Lankan government and the enthusiasm of theprivate partners, the mobile industry is all set to grow and bridge thetechnological divide between the various strata of the society”.