By Agence France-Presse
"Project Loon" uses roaming balloons to beam internet coverage and planned to connect Sri Lanka's 21 million people to the web, even those in remote connectivity black spots.
But just a year after testing began in Sri Lanka regulators have been unable to allocate Google a radio frequency for the airborne venture without breaching international regulations.
Communications minister Harin Fernando said the Geneva-based International Telecommunications Union (ITU) was opposed to Google using the same frequency as Sri Lanka's public broadcasters to provide its internet.
"It boils down to a legal issue," Fernando told reporters in Colombo.
"The government as well as Google are lobbying the ITU, but if we fail there's a risk Google will go to another country that is not bound by these rules."
Google's giant helium-filled balloons act as floating mobile base stations, beaming high-speed internet to areas beyond the reach of ground-based telecommunication towers.
The first of three balloons -- which roam the stratosphere at twice the altitude of commercial aircraft -- entered Sri Lankan air space a year ago after being going airborne in South America.
The government and Google planned a joint venture where Colombo would receive a 25 per cent stake, without any capital investment, for sharing its cellular spectrum with the project.
One of the balloons was found in a Sri Lankan tea plantation after its maiden test flight last year, although authorities described it as a controlled landing.
About one-third of Sri Lankans have regular access to the internet, a figure expected to swell through the Loon project.
Sri Lanka was the first country in South Asia to introduce mobile phones in 1989, and also the regional frontrunner when it unveiled a 4G network three years ago.