In early 2025, approximately 27 Sri Lankans in every 50 were electronically connected, with a total of 29.3 million active mobile connections, according to GSMA Intelligence, a global source for mobile industry insights. The report released in January revealed that there had been 12.4 million individuals using the internet in that time period, with online penetration standing at 53.6%.
Notably, the Information and Communication Technology Agency (ICTA) noted that internet subscriptions surged in the second quarter of 2024, reaching 26 million connections. Although the numbers seem promising, urban and rural areas alike face internet connectivity issues, with sudden drops in connection quality, as well as spotty and sometimes begrudgingly slow speeds experienced during what users call the ‘peak hours.’
While Sri Lanka foresees the launch of 5G technology as a start to better connectivity and enhanced broadband penetration, home broadband penetration in the country at present is still ranked as low as 131st out of 153 countries worldwide. Nevertheless, Sri Lanka continues to aspire to reach a benchmark goal of raking in $ 5 billion in digital export revenue by 2030.
Subject experts speaking to The Sunday Morning Business as well as past reports produced by Government entities such as the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) detail a host of interconnected setbacks to achieving better connectivity, ranging from infrastructure limitations linked to the costliness of investment, low Average Revenue Per User (ARPU), and the need to explore network-sharing models used by other countries in the region.
Infrastructure limitations
Speaking to The Sunday Morning Business, University of Sri Jayewardenepura Department of Information Technology Head Prof. Lasith Gunawardena attributed poor internet reliability during peak hours to infrastructure limitations struggling to meet increasing demand.
“In many regions, underinvestment in broadband expansion contributes to congestion and slow speeds. Wireless connectivity, in particular, faces added challenges; signal quality can degrade due to physical obstructions, distance, and even weather conditions like rain,” he said.
At present, 97.8% and 100% of the country, respectively, have access to 3G and 4G networks, while improvements in household and overall internet access penetration are also visible. Notably, GSMA Intelligence’s figures also suggested that 10.7 million people in Sri Lanka did not use the internet between the start of 2024 and the beginning of 2025.
Ookla, a global connectivity intelligence firm, recorded Sri Lanka’s median mobile internet download speed via cellular data networks at 20.22 Mbps and its median fixed internet download speed at 22.30 Mbps. Although there is no universally accepted standard for mobile internet speeds, the global median download speed for mobile internet via cellular data networks, at the time of publishing this article, stands at 61.52 Mbps.
Prof. Gunawardena stated that the stability of last-mile connectivity too remained a significant aspect of the issue. “A significant proportion of internet connectivity issues can be traced to last-mile connectivity,” he said, proposing investments into fibre-optic networks, while admitting that it may not resolve the issues entirely.
“Expanding fibre-optic networks closer to end-users is a highly effective and scalable solution, although this may not solve every connectivity issue. While fibre ensures higher bandwidth connectivity, it may not automatically result in better performance if too many users are concentrated in a single area and the shared infrastructure – such as local distribution point – is not adequately scaled,” he noted.
Roll-out plans
Sri Lanka’s mobile market is dominated by two major operators; Dialog and SLT-Mobitel, of which the second is a fully-owned subsidiary of Sri Lanka Telecom, the national telecommunications services provider.
A source from a leading telecommunication operator told The Sunday Morning Business on condition of anonymity that measures taken by the Government to structurally solve connectivity issues had been hampered by Sri Lanka’s economic crisis.
“Economic crisis-related investment restrictions and a non-viable financial structure, such as the low ARPU, in addition to high costs borne due to the currency depreciation, resulted in the curtailment in investments,” the source said.
They suggested that the answer to solving poor last-mile connectivity lay in making fibre connectivity more viable, an already well-established sentiment among the public. They added that promoting community communication centres in areas where it had not become viable yet, including deep rural areas, would be key to expanding coverage.
Interestingly, they noted that a lack of multiple operators meant that there was less competition and less likelihood that service would improve in a general sense.
Sri Lanka is currently set to roll out its 5G network within the year, with the Minister of Digital Economy having stated that a spectrum auction would be held. Plans for the roll-out can be traced to three years ago, having undergone two postponements under two Governments in the meantime.
At present, based on reports, the TRCSL has approved the operations of telecommunications providers SLT-Mobitel and Dialog Axiata’s pre-commercial 5G services, ahead of the issue for commercial fixed, mobile, Internet Service Provider (ISP), and satellite broadcast licences.
Optimistically, the telecommunications source suggested that Sri Lanka had the potential to launch itself further into a future of embracing 5G using its existing infrastructure.
“You can start with an existing tower. A common network should be rolled out by the Government or an independent entity allowing all operators to share a single network – the same radio/multi-core network, with a roadmap to allow them to roll out independently down the line when the economy prospers,” the source said, referring to it as the “Malaysian model”.
Malaysia’s Digital Nasional Berhad (DNB) is a hybrid approach that includes both public and private investment in the 5G network, which has enabled multiple operators the ability to share the same network to expedite deployment and coverage across the country, with important considerations for potential competition through government oversight.
“Alternatively, or simultaneously, operators should be allowed to do their targeted roll-out for indoor coverage for their enterprise customers,” the source said.
They added that by following these steps, it would significantly enable Sri Lanka to cut downtime and speed-up its infrastructure roll-outs in future. On a more ambitious note, they said that shutting down 3G networks and the prohibition of 3G phones from being imported into the country would also help.
Referring to their point about ARPU, they stated that these would come at the cost of operators raising prices by at least 20%. “Industry rates should be increased by 20% since it wouldn’t be sustainable for operators otherwise. There should either be a price increase or tax, or other cost reductions from local bodies,” they said, expanding on the feasibility of improvements.
Further pushing back on the Government’s plans to auction 5G spectrum allocations, the source stated that an administrative allocation of spectrum for 5G would be ideal, rather than an auction. They reasoned: “These higher entry costs to 5G will be transferred to customers by means of a possible tariff, or operators will not roll out 5G.”
Prof. Gunawardena too, while positing that infrastructure setbacks lay at the centre of the broader problem, stated that wireless spectrums were overwhelmingly costly, further limiting efforts for connectivity expansions. “When considering wireless connectivity, the existing spectrum is both limited and expensive, making it harder for telecom operators to expand capacity affordably,” he said.
TRCSL Spectrum Roadmap
In the Spectrum Roadmap released in 2024 by the TRCSL, the report cites Malaysia’s launch of DNB, meant to operate and lease 5G infrastructure to new and existing telcos. With DNB fully owned by Malaysia’s Ministry of Finance, the report noted that 5G spectrums 700 MHz, 3.5 GHz, and 28 GHz were identified for allocation.
“This decision was made in consideration of (1) the dramatic increase in traffic due to Covid-19, which underscores the importance of connectivity including the speeds and coverage; (2) the high investment needed for 5G, which could be between 25% and 75% more than 4G; and (3) the ability to roll out 5G more rapidly,” the report read.
In reference to the Special Purpose Vehicle (SPV), it added: “The SPV will only offer wholesale services to ensure a level playing field for all retail service providers.” It further noted that Singapore had completed its own auctioning process for its 5G spectrum allocations via a ‘beauty contest,’ which evaluates competitor bids based on non-price factors, such as network roll-out plans, coverage, and technology used.
According to reports, the Infocomm Media Development Authority (IMDA) of Singapore evaluated proposals based on their ability to meet policy objectives, rather than solely through an auction. This method aimed to ensure nationwide 5G coverage by the end of 2025, along with security and resilience requirements.
Govt. stance
Speaking to The Sunday Morning Business, Deputy Minister of Digital Economy Eranga Weeraratne said that Sri Lanka was at present following the International Telecommunication Union Radiocommunication Sector (ITU-R) standards of allocating its 5G spectrum. He also revealed that the ministry was in the process of working on infrastructure plans beyond the launch of 5G.
“We are undertaking multiple development activities. For example, we are going to establish more telecom towers in areas where the coverage is poor, get the bandwidth and connectivity measured by the telecom regulator, and ensure that all telecom service providers provide appropriate service to those areas,” Weeraratne said.
He explained that the introduction of 5G was to enable ISPs to offer better connectivity primarily within urban areas, adding: “Through 5G technologies, we are going to expand coverage as well as capacity. Currently, with 5G, there is a bandwidth issue in urban areas.”
“Although operators want to provide better connectivity, capacity, etc., there is a limitation in the spectrum. Therefore, they need the 5G spectrum, and for that there will be a 5G auction happening most likely within this year,” the Deputy Minister further noted, acknowledging the anticipation that existed within the industry.
“Once 5G is established, it will provide better bandwidth as well as spectrum coverage to cover all urban and rural areas with 4G. The other concern is that there are huge areas that are covered by 2G as well,” he said, explaining that certain parts of Sri Lanka were still serviced through 2G networks, which he pointed out was a reason why these areas needed capacity upgrades.
“We are now going for a 2G sunset mode, where we are looking to shut down 2G within a timeline of three years and get all operators to have at least 4G coverage in these 2G areas. Further, by shutting down 2G, they will be reducing a huge cost and this recovered cost can be invested in 4G coverage,” he said.
Weeraratne concluded that with the spectrum allocation following the ITU-R model, the Government had identified two 5G slots within the spectrum. “For the 5G roll-out, we have identified two spectrum slots and 3.5 GHz spectrum space, so two players can be invited for those spectrum slots.”