MUMBAI (Reuters) - Bharti Airtel Ltd., India’s top mobile operator, launched operations as the fifth mobile operator in Sri Lanka with a $200 million investment.

The services were launched on a third generation network through its subsidiary Bharti Airtel Lanka, the company said in a statement. Bharti enters into the island market, which already has a more than 50 percent mobile penetration rate, amid fierce competition.
At the launch in the Sri Lankan capital Colombo, the company said it signed a three-year managed network deal with Huawei HWT.UL and has partnered with IBM to manage its IT, infrastructure and application requirements in Sri Lanka.
Amali Nanayakkara, CEO at Bharti Airtel Lanka, said the company will provide simplified tariffs to increase usage time and reduce costs, but would not reveal the target for 2009.
Bharti will compete with Sri Lanka’s leading mobile phone operator Dialog Telekom DIAL.CM a unit of Telekom Malaysia, Sri Lanka Telecom’s SLTL.CM Mobitel, Hutchison Telecommunications International and Millicom International Cellular.
Soon after the launch, shares in Dialog Telekom plunged 12.7 percent to a life-low 4.80 rupees a share.
“This is mainly on the Airtel launch as some Dialog shareholders got panicked,” said Geeth Balasuriya, assistant research manager at HNB Stockbrokers.
“Before the launch many people have applied for Airtel connections. But I don't think there will be significant impact in the market, unless Airtel provides least-cost services.”
Bharti delayed its launch from mid-2008 due to interconnection issues with local telecom firms.