Aug. 15 (Bloomberg) -- Bharti Airtel Ltd., India's largest mobile-phone operator, said it plans to spend $200 million in the next five years in Sri Lanka to tap users of South Asia's first high-speed wireless network.

New Delhi-based Bharti got an offer in January to provide so-called second- and third-generation mobile phone services as Sri Lanka's fifth carrier. The company plans to start its services in the island by April 2008, it said in a statement in Colombo today.

``Bharti needs a radical strategy for a quick roll out to keep up with the intense competition here,'' said Vajira Premawardhana, head of research at Lanka Orix Securities Pvt. in Colombo. ``The landscape in Sri Lanka can't be compared to India, and it would make more sense for Bharti to concentrate on urban areas to optimize revenues.''

Operators including Dialog Telekom Ltd., the island's largest, are starting services such as video-conferencing and faster Web access on handsets after Sri Lanka last year became the first in South Asia to award so-called third-generation, or 3G, licenses. Dialog, a unit of Telekom Malaysia Bhd. which has 60 percent of the cell-phone market in Sri Lanka, spent 16.1 billion rupees ($144 million) to expand its network and increase customers to 3 million at the end of 2006.

Dialog said in June it plans to invest about $300 million in two years to expand media and call services, including the nation's first third-generation network.

Overseas Expansion

Bharti's network will span at least 65 percent of the South Asian island's ``geographic cover,'' starting with a roll out in the capital, Sanjay Nandrajog, director international operations, said in Colombo today.

Bharti, about a third owned by Singapore Telecommunications Ltd., is aiming to expand overseas even as it increases spending on its network in India to as much as $3.5 billion this year to maintain its lead in the domestic market.

``Our plans for Sri Lanka clearly demonstrate our commitment to the market and also our confidence in the potential that this market holds in Airtel's overseas expansion journey,'' Sanjay Kapoor, the Indian phone company's president for mobile-phone services, said in the statement.

Bharti is considering setting up a mobile-phone unit in Vietnam, the Economic Times reported yesterday, citing unidentified people.

The Indian company, which runs a nationwide network based on global system for mobile communications technology, offers similar facilities in Jersey in Europe and in the Seychelles.

Bharti is keen on acquiring stakes in ``growing'' mobile- phone companies in South Asia, particularly Bangladesh and Sri Lanka, Chairman Sunil Mittal said in an interview in Singapore on June 16. The company is also bidding for ``a few'' mobile- phone licenses in Africa, Mittal said.

Number Portability

Sri Lanka's mobile-phone operators may be allowed to offer free incoming calls and number portability in two years, Telecommunications Minister Rauff Hakeem said on June 22.

About half of Sri Lanka's 20 million people are expected to have mobile phones by the end of 2008, rising from 35 percent, he said.

About 5.4 million people, or 27 percent of the island's population, owned mobile phones at the end of 2006, according to the central bank.

Colombo-based Dialog, Sri Lanka's biggest company by market value, said on July 26 group first-half profit fell 1 percent to 4.87 billion rupees as a civil war in the northern and eastern parts of the island eroded demand for its services.

Dialog and its rivals, including the mobile-phone unit of the island's biggest phone company Sri Lanka Telecom Ltd., had transmission disruptions as government soldiers confronted Tamil Tiger rebels in the east of the island.

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net.

Last Updated: August 15, 2007 05:21 EDT