Sri Lanka - Country Commercial Guide
Telecommunications and Information Technology
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Sri Lanka’s ICT sector and its sub-sectors including IT/ITES, and Telecommunications towards Sustainable Development Goals (SDGs) has planned for a three-billion-dollar industry by 2024 through export revenue and has projected to contribute $15 billion to the Digital Economy by 2030. According to the Federation of Information Technology Industry Sri Lanka (FITIS) Sri Lanka will enter the third wave of technology during the digital transformation, with 750 tech companies, 1,000 IT and IT-infused startups and 500 other technology startups in place by 2024.  ICTA believes that this expansion and technology innovation would enable the industry to reach the $3 billion export revenue figure.  However, the loss of skilled ICT professionals has impacted the growth of the sector.

The ICT industry states it is crucial for the government and policymakers to understand the importance of digitization and facilitate its evolution by creating an enabling environment.  The sector needs consistent, and long-term policy interventions to improve the overall environment in which the industry functions. Improving the ease of starting and operating a business, investing in education, training of the labor force, flexible labor market regulations, interventions to improve women’s labor force participation, improving access to finance, unlocking land supply, and improving infrastructure would yield better outcomes for the ICT sector and the investment climate in general. In 2018, the country initiated the process of adopting fifth generation (5G) technology and mobile companies have conducted 5G trials in the country, but the 5G spectrum has not yet officially been sold to the carriers, thus limiting access to pockets of Colombo.  U.S. software providers have been successful in selling solutions to private customers and to some public sector agencies.  Sri Lanka is building a national fiber optic network linked to numerous international cables.  This 45,000-kilometer network, built and managed by Sri Lanka Telecom, will serve as the backbone for fixed broadband and mobile services, including 5G. 

Currently, the ICT sector generates $1.5 billion of foreign exchange in 2022 and employs around 175,000 of skilled workforce in the country.  ICT services sector is the country’s fourth largest export earner with over 300 companies that currently serve several Industry verticals. Broadly it is segmented as Information Technology (IT) and Information Technology Enabled Services (ITES).  The ICT/BPO sector is expected to contribute around 8 to 9 percent contribution to total exports in 2023.

Fixed telecom lines recorded an overall year-on-year decline of 7 percent in 2022, despite the growth of 6.3 per cent registered in the first half of 2022. During the year, mobile connections also declined by 3.7 percent, year-on-year, and total internet connections that comprise mobile and fixed internet connections contracted by 2 percent, year-on-year. Fixed and mobile telephone penetration, as measured by connections per 100 persons, stood at 12.0 and 142.0, respectively, while internet penetration stood at 97.7 by the end of 2022. Nevertheless, the total data usage, which had been broadly declining since October 2021 with the removal of pandemic related mobility restrictions, showed a gradual increase during the year, from March 2022.

The country is targeting significant usage of shared solutions and digital services by the end of 2024. Industry experts believe the country will enter the third wave of technology during the digital transformation, with 750 tech companies, 1,000 IT and IT infused startups and 500 other technology startups in place by 2024. The government technology agency is estimating this expansion would enable the industry to reach the $3 billion export revenue.

Sri Lanka is also emerging as a global IT Business Process Outsourcing (BPO) destination of choice in several key areas.  Sri Lanka was ranked 25th among the top 50 global outsourcing destinations in 2019 by AT Kearney.  Sri Lanka’s software industry has grown significantly over the past decade.  The software services sector includes telecommunications, banking, financial services, and insurance (BFSI) and software testing.  The BPO sector includes financial & accounting services, investment research, engineering services, and UK-based legal services.  According to the World Bank, Sri Lanka has relatively low labor costs compared to other BPO destinations.  HSBC, RR Donnelley, Sysco LABS, Astron, 3SG, HelloCorp, Innodata, and WNS Global Services have set up call centers or BPO operations in Sri Lanka.  Numerous U.S. companies, many small or medium sized, are developing software in Sri Lanka.  The government seeks to further develop Sri Lanka as a base for information technology, call centers, and outsourcing.

The telecommunications sector in Sri Lanka is one of the country’s most dynamic sectors, contributing significantly, both directly and indirectly, to investment, employment, productivity, innovation, and overall economic growth.  Sri Lanka’s telecommunication market has five mobile operators serving a population of 22 million.  The telecommunications sector in Sri Lanka is responsible for substantial FDI. 

Sri Lanka is connected to the Southeast Asia-Middle East-West Europe 4 (SEA-ME-WE 4) and SEA-ME-WE 5 projects, the submarine cable systems linking Southeast Asia to Europe via the Indian Sub-Continent and Middle East.  The projects aim to take these regions to the forefront of global communication by significantly increasing the bandwidth and global connectivity of users along its route between Singapore and France.  SEA-ME-WE 4 fiber optic cables provide a bandwidth capacity of 4.26 terabits per second, with a 25-year guaranteed lifespan for the technology.  SEA-ME-WE 5 has an increased bandwidth capacity of 24 terabits per second.  This submarine cable system offers Sri Lanka a competitive regional bandwidth advantage and provides the opportunity for Sri Lanka to become a globally competitive business hub.  The proposed Southeast Asia–Middle East–Western Europe 6 project is expected to supply an additional 12 terabits per second of bandwidth capacity, bringing more capabilities to Sri Lanka’s IT sector.

Leading Sub-Sectors

  • Telecommunications Equipment and Infrastructure
  • Software
  • Mobile applications


  • Opportunities for digitizing the government procurement system.
  • There are opportunities for U.S. software and hardware vendors.
  • There are opportunities for software application (app) development.
  • There are opportunities for telecommunications equipment.


  • Information and Communication Technology Agency         
  • Sri Lanka Association for Software and Services Companies