The Sri Lankan government is making broadband more affordable with a free WiFi project that it launched earlier this year, but while some telecoms operators are all for it, others fear that such initiatives will put them out of business.

The state is in the process of rolling out 1,000 WiFi hotspots in public places that will allow users to access up to 100 MB of data per month for free, thanks to agreements with telecoms operators.

Last month the state said it has set up around 100 of these hotspots.

“There are operators that support this and there are operators that are dead against this,” said Chanuka Wattegama, a board director at Sri Lanka’s Information and Communication Technology Agency (ICTA), the government body that is spearheading the project, at CommunicAsia in Singapore last week.

He did not specify which operators are backing the programme, but noted that on balance the big players are supportive, while smaller providers believe it poses a strong cannibalisation risk.
“They are afraid of losing their market share,” Wattegama said. “They fear for their own survival.”

They might have a point.
The operators involved in the project can charge for connectivity once a user exceeds 100 MB at a rate of $2 per gigabyte. While 100 MB is “not much for an advanced user”, it is rare for free WiFi users to cross the threshold.

“There are so many people who don’t cross the 100 MB limit,” Wattegama said. “Perhaps it’s the affordability.”

That is bad news for the smaller operators. “Offering broadband can be loss-making, at least for some,” he admitted.

However, he believes the free WiFi project could help drive the market.

“It might bring down the broadband prices. It might improve usage,” Wattegama said.

In addition, it means that Sri Lanka will have “1,000 new WiFi hotspots that are [otherwise] not commercially viable.”

(Total Telecom in Singapore)