What is causing downward pressure on international call rates to India?  Just a short time back, Dialog cut prices to India.  Given today’s move, it will not be long before SLT comes down from its LKR 0.15/0.18/minute levels.  Is it the sixth paragraph of the SAARC Colombo Summit Declaration or the entry of Airtel?  Airtel has yet to post its international rates on its website, so is this all anticipatory?

In its full color advertisement in today’s Sunday Times, Lanka Bell claims paying users for incoming calls is a new chapter in Telecom history. Is it? May be in Sri Lanka. But we have already discussed similar strategies elsewhere.

Sri Lankan fixed access provider Lanka Bell said it would pay subscribers for incoming overseas calls at the rate of 50 cents for every minute, regardless of duration, country of origin or the number of calls received.
The company, in a statement, described the offer as passing on of the benefits of its three billion rupee investment to connect Sri Lanka to the FLAG undersea fibre optic cable network owned by India’s Reliance group.

Full story here.

This should make it easier for the Sri Lanka regulator to bring down termination charges for calls from within the SAARC, and implement the SAARC Colombo Declaration.

Then came SEA-ME-WE 4 and the BSNL cables. More cables, but still one operator, SLTL. Now finally, we have operator redundancy. This should be sweet music to the BPO industry.

LANKA BUSINESS ONLINE – LBO

Lanka Bell, one of Sri Lanka’s privately held wireless telecom operators, has tied up with India’s FLAG Telecom to lay an undersea cable linking both countries.The 27 million dollar deal will see a third landing on the cable that currently runs from India to the Maldives, Lanka Bell’s Director, Damien Fernando said.

Sri Lanka’s two private wireless local loop telecom operators have been called up to pay around Rs. 400 million as duties for importing handsets, industry officials said.

Last month, the island’s Board of Investment (BOI) slapped a 33 percent import duty on Code Division Multiple Access (CDMA) handsets with immediate effect.

CDMA is a low cost cellular technology that has been effectively used world over to provide cheaper connectivity to rural homes. Though the technology is similar to mobile phones, the handsets are similar to a bulky fixed line unit.

Being BOI companies, Suntel and Lanka Bell, are allowed to import customer premises equipment or handsets without paying import duties.

However, since rolling out CDMA services since last June, Lanka Bell and Suntel have been asked to pay up for around 180,000 units sold todate.

Sri Lanka Telecom (SLT), which is partially owned by the government and Japan’s NTT and pays taxes regularly, however has got away, despite selling around 100,000 CDMA connections, according to the telecom watchdog.

“We are going on the premise that both operators (Lanka Bell and Suntel) sell the equipment to the ultimate user, hence they have to pay,” BOI chief Lakshman Watawala explained.

LANKA BUSINESS ONLINE – LBO

Sounds like one part of the government wants to increase the new customer’s connection costs while another is trying to decrease it (as long as the service is obtained from the incumbent–details in the LBO story)? I hope this makes sense to someone.