It is fair for Tigo and Dialog to give their customers what they want, which is not to pay for incoming calls. Nothing is free, so they are paying for the incoming calls through their outgoing calls.

What is not fair is that the fixed networks keep all the money paid to them by their customers for calls to mobile numbers; and not pay any of it to the networks who spend resources to complete the calls.

just thought about the recent changes in the mobile market, outgoing free offers, “Upahara” for public sector employees by mobitel.It sounds like a political move infavour of the present government ( The posters and Advertising campaign implies so).

Actually speaking, can an entity offer such a scheme profitably?? where is the money comming from network expansion etc etc??if so why Sri Lanka Telecom cannot make such an offer???

or are we seeing a classical example of cross subsidisation between SLT and Mobitel???if so being a SLT consumer am I paying for somebody else’s calls???

is cross subsidisation legally allowed in Sri Lanka????

Appreciate if somebody clarify my doubts!!!

Think they also just think of fixed line as a service (like electricity) and mobile as a luxury (to be taxed). Think the fact is that mobile more than anything enables average people, and now enables them to access Internet. Anything that can leave the golden goose alone is welcome.

In order to complete a call involving two networks (e.g., Dialog and SLT), the resources of both networks (switches, spectrum, wires, etc.) have to be used.

Currently, when a Dialog customer wants to call an SLT number, she pays a retail price to Dialog. In order to complete the call, Dialog pays a wholesale termination charge (normally less than the retail price the customer paid) to SLT. That is what adds up to the LKR 593 million I refer to above.

Currently, when a SLT customer wants to call a Dialog number, SLT charges that customer a price (national call, if I recall correctly). It does not pay Dialog anything, because under RPP, Dialog is free to cover the cost of completing the call from an incoming call charge. Under CPP, SLT would have to pay Dialog a termination charge.

Jackpoint’s objection to CPP should not be to CPP as such, but to high termination charges levied by mobiles in the UK. In India, they have CPP, but the termination charges are about the same for fixed-to-mobile and mobile-to-fixed.

There is nothing sacred about CPP. But in a converging environment you cannot have CPP for some and RPP for others. You got to have all under RPP or all under CPP. Stephen Littlechild makes a theoretical argument that RPP is superior to CPP, but it is clear that what the people want is CPP. They do not want to pay for calls initiated by others.

On the subject of industry consolidation, it is inevitable given the price war and there can only be one winner - SLT/Mobitel. They do not need to make a profit and I dont think Mobitel CAN make a profit selling the Uphara package (240 per month for virtually free calls during daytime)

Also we hear that SLT has managed to get instructions issued that all government departments and state institutions can only use SLT. This regime will only be too delighted to see the exit of the privately owned telcos and the emergence of the national champion.

The TRC will keep issuing new licenses - the government needs the cash but SLT seems to have a mandate to drive everyone out of business.

The success, or failure, of TIGO’s move would depend on one player: Sri Lanka Telecom.

I do not know of any countries where mobile industries has collapsed as described above. Puzzled by the analogy to the US housing market. The problem was not price competition, but problems in the credit market which created an unsustainable bubble.

If the TRC acts to quickly level the playing field for the mobile operators by ordering the fixed operators to pay termination charges for calls completed on mobile networks, it will give the mobiles another revenue stream which should help with the collapse you fear.