In a letter dated October 10, 2008 to TRC Director General Priyantha Kariyapperuma – copied to The Sunday Times – Mr. Nanayakkara states that ‘OPA’s experts in their presentation to the TRC, around March 2008, explained and established that the TRC’s tariff proposal recommended to the SC is flawed mathematically and technically and that it is in violation of the provisions in the Sri Lanka.

In particular, Mr. Nanayakkara writes that the TRC did not put up to the SC that the per-line operating costs of the SLT since its privatization in 1998 has been declining at around 15% per annum. The TRC also provided disinformation to the SC, to conceal the urgent need arising from above, to update the outdated X factor of price cap CPI – X. The X factor is not a one-time set value. Its regular revision is an essential requirement that underpins its core aim which is to sustain market competitiveness in the fact of advancing technology and declining costs, the letter said.

Further, Mr. Nanayakkara said the TRC also did not inform the SC of the abrupt suspension of this license condition in 1997, on the unjust insistence of Nippon Telephone and Telegraph (NTT), at the time it entered into a joint agreement with SLT, which stalled reduction of tariffs. The TRC also did inform the SC that it failed to revise X in 2002 when the suspension was terminated in 2002 and the Government took measures to revamp the market competitiveness.

Read the full report in ‘Sunday Times’ here.

Imposed few weeks back, they specify CDMA phones can be used only at the address it is issued to. (CDMA technology is used in Sri Lanka for fixed wireless and not mobile)

How on earth a CDMA phone can be restricted to one address, asks Udurawana, when you sometimes even have to climb to your neighbour’s wall to receive signals.

We hope the Sri Lanka rural users who have faced similar problems would readily empathise. (We hear once the mother-in-law of a former Director General of TRC too had to take her phone to a particular spot at a paddy field to catch signals)

Mr. Priyantha Kariyapperuma may want to respond to Udurawana. Thanks in advance for CCing LIRNEasia.

LANKA BUSINESS ONLINE – LBO

Sri Lanka’s teleco operators are pushing the industry regulator to remove technology limits and allow networks to share resources as part of a broad plan to liberalise the market further, officials said.

The wish list — prepared during an industry pow-wow with the telecom watchdog last week — also includes prickly issues like allowing free incoming calls for seven million mobile phone users, re-aligning spectrum and allowing users to keep their own number when switching to rival operators.

“We asked operators to put down everything they wanted. The list will be first pruned down on a priority basis, before target dates are set for implementation,” Telecommunications Regulatory Commission (TRC) Director General, Kanchana Ratwatte said.

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Regulation and FDI: Sri Lankan Telecommunications Industry

By

Ms Asoka Fernando, PhD Candidate, Dept. of Management, Monash University

Abstract

This paper examines the role of the telecommunications regulator in Sri Lanka and assesses the effectiveness of its interventions in attracting foreign direct investment (FDI) into the telecommunications sector from a management point of view. The study finds that despite Sri Lanka has responded to globalization by liberalizing the telecommunications sector and timely establishing a regulator to monitor the industry, the interventions of the Telecommunications Regulatory Commission (TRC) have been only partially successful particularly in terms of meeting its full potential of FDI into the sector. Interventions of TRC have been reviewed in terms of creating environment for market entry and competition, management of scarce resources, tariff regulation and independence of the regulator, and revealed its inability to create sustainable investment climate for private investors. In conclusion, we argue that it is time to investigate whether the current regulatory model is the most appropriate arrangement for the prevailing economic, social and cultural circumstances in Sri Lanka.

Key Words: Privatization, Telecommunications, Regulation, Foreign Direct Investment

The full paper is here.  Comments are welcome