27 January, 2023


Possibilities for Demand-Driven Growth in Sri Lanka’s Online Infrastructure

Despite making some significant strides in the last few years, Sri Lanka’s online infrastructure is still lacking when compared to the developed standard. With a disparity between mobile and cabled internet access, the current Sri Lankan rollout indicates progress could be indirect, helped by external demand more than direct investment supply. In this way, a new generation of online opportunities setting up within Sri Lanka’s borders might help foster infrastructural growth within the next decade.

Statistics on Growth

According to statistics on Sri Lanka’s internet, total internet penetration is low. Unlike most nations which have experienced somewhat steady growth over the last decade, Sri Lanka has plateaued since 2017, with penetration sitting at around 34%. This is far below the global internet penetration rate of 62.5%.

Further analysis from the Department of Census and Statistics shows that just 36% of Sri Lankans used the internet in 2020. Of these 7.8 million users, just over three-quarters accessed the internet via smartphone. The average speed of Sri Lanka’s internet connections over mobile networks reach 13 Mbps in 2022, while fixed internet speeds averaged 18.2 Mbps. Again, these are well below the global averages of 30.8 Mbps and 67.3 Mbps respectively.

Source: Pixabay

Drivers of Growth

As we’ve talked about before, Sri Lanka is in dire need of many types of development. Development for the ostensible sake of progress has been notoriously complicated within Sri Lanka due to corruption. For this reason, more helpful progress has often come from areas that are looking to expand current systems and meet untapped markets, not that which seek to fulfill ideas built on messy idealism.

The biggest example of this approach in action is demonstrated by the profound success of the mobile side of online connectivity. Taking up the majority of internet connections, the predominance of mobile systems comes from both their use as general communication tools and their place within modern online systems.

Over the last few decades, mobiles have become increasingly ubiquitous. As communication systems, their use in personal and professional settings is too great to ignore. Over time, smart functionality in mobiles became standard, which necessitated investment in mobile online infrastructure. In this way, mobile internet becoming popular was as much about adapting to needs as it was about making forward-looking investments.

Once the framework had been set, growth then came from the industries best poised to take advantage of the leap in internet systems. Online payment is one such industry, with services like PayPal simplifying both national and international transactions. This was a factor of convenience that was too profound to ignore, offering speed and reliability that brick-and-mortar establishments often couldn’t.

The same could be said for opportunities surrounding entertainment, such as with the growing world of online casino games. With only two physical casinos operating in Sri Lanka, online versions give enthusiasts a far more open and convenient way to play. Backed by casino bonuses like free spins and deposit matches, these and other entertainment systems act as a driver for users toward mobiles. Like with banking, this has the downstream effect of expanding mobile infrastructure. In addition, the portal provides Asian users with guidelines and game recommendations for playing on mobile devices.

For home internet solutions, entertainment again plays a significant part. Dialog ViU is one of the biggest performers here, in no small part thanks to its ability to bring sports broadcasts all over the nation. In addition, more international standards like Netflix also play their part in developing demand for online connectivity.

Source: Pxhere

Together, both tools and entertainment have been the backbones of the major jumps forward made by Sri Lanka’s online systems. While we don’t want to suggest that governmental will and projects play no part as they’re still very important, this is still a case where market forces are filling in the gaps.

As long as the market continues to offer affordable and reliable possibilities, developers will continue to have reasons to expand the scope on the supply side of this equation. While progress has been slow so far, this type of growth can accelerate in the right circumstances. We can only hope that the visibility and success of the existing online systems continue in this way, so Sri Lanka can overcome its current plateau, and enter a new age of digital accessibility.

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