In 1997, NTT bought 35 per cent of a badly managed government phone company called SLT along with the right to manage it for five years for USD 225 million. The decision was bracketed by the Central Bank attack (on a per capita basis more devastating than the World Trade Center hit of 11 September 2001) and the bombing of an empty [Sri Lankan] World Trade Center. Many wondered what the logic was. One explanation was that NTT saw Sri Lanka as a stepping stone to India. But no step was taken.
Others saw it as the only sensible foreign investment made by NTT, a high-cost operator that was completely unaccustomed to the challenger role, but was the quintessential incumbent. Their culture meshed perfectly with the…
Broadband | Open up those highways | Economist.com
As Taylor Reynolds, an OECD analyst, puts it, innovation usually comes in steps: newcomers first rent space on an existing network, to build up customers and income. Then they create new and better infrastructure, as and when they need it.
In France, for example, the regulator forced France Télécom to rent out its lines. One small start-up firm benefited from this opportunity and then installed technology that was much faster than any of its rivals’. It won so many customers that other operators had to follow suit. In Canada, too, the regulator mandated line-sharing, and provinces subsidised trunk lines from which smaller operators could lease capacity to provide service.
In South Korea, where half the population lives in flats, each…
Tags: Broadband, Canada, communications ministry, France, installed technology, Japan, NTT, OECD, South Korea, Taylor Reynolds, then installed technology.
The usually well-informed LBO.LK appears to have gotten confused in the “fog of war” created by interested parties seeking to extract rents from the sale of 25% of SLTL shares by NTT to GTH, both private companies, and by the unfortunate opacity of the transaction (something that is quite surprising because SLTL is a publicly traded company and the interests of thousands of shareholders are affected by the transaction).
The source quoted by LBO below appears to have been quite familiar with the ORIGINAL shareholders agreement signed between the Government of Sri Lanka and NTT in 1997, but appears to have been comatose since then. Provisions regarding no universal service obligations (USO) and international exclusivities were in that agreement and did bind the Government of Sri…
Recent Comments