No half-way house to unified licensing?

Posted on March 1, 2006  /  0 Comments

Suntel to invest Rs. 8 b for countrywide CDMA push
Plans to roll out low cost telephone service in Jaffna soon

By Poornima Weerasekara (Daily Mirror, 1 March 2006)

Suntel yesterday unveiling its roadmap for the next three years announced their plans to invest Rs. 8 billion to expand the CDMA network island wide.
“The coverage of our 155 base stations is better and wider than most of the mobile operators today,” Suntel Managing Director Jerry Huxtable said.
“We have plans to build about 40 base stations by the middle of the year, with plans to construct another 50-60 base stations in the 2nd quarter,” he added.
The Suntel CDMA network is currently the largest network in Sri Lanka covering 80% of the population in 22 districts.
They are also planning to build base stations in Jaffna, given the situation is stabilised in the region.
“Earlier we had a plan to build 4 base stations in Jaffna. But this was put on hold as the situation in the region at that time deteriorated,” Mr. Huxtable said.
However, he said that Suntel was optimistic about entering the region now that the peace situation seems to be stabilised.
Suntel has also completed a successful test run of the Evolutionary Data Optimiser (EVDO) technology, which is capable of providing broadband wireless connectivity with peak data rates of 1.2 mega bits per second. They have currently applied for a new frequency in order to roll out the service, However, after 4-5 months of waiting the TRCSL is yet to allocate the required frequency.
Suntel also urges the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) and other ministries concerned to “create a licensing environment that is fair for all operators.”
“Increasing offers are made by SLT and Mobitel together. Increasingly Dialog is also moving into the fixed line arena,” Mr, Huxtable said, adding that “the Suntel CDMA network is able to provide the mobility required by users.”
“So if creating an equitable playing field means going for a mobile license, then yes we are prepared to go for it,” he added.
The company also recorded a year on year revenue increase of 35% and profits and a 23% EBITDA (earnings before interest, taxes, depreciation, and amortization). Their customer base also soared by 81% to 188,000 customers in the last six months since rolling out their CDMA technology.
“We are estimating a revenue growth in the range of 35-40% in 2006,” Mr. Huxtable added.
However, the import duty imposed on fixed line handsets is threatening to erode the profits of wireless local loop operators.

Box story: Prices of CDMA connections to rise because of duty on hand set imports.

Suntel Ltd. Technical Director Mr. Mahinda Ramasundara yesterday said that import duties on CDMA handsets was threatening to push up the prices of CDMA phones.
According to Mr. Ramasundara CDMA import duties stood at around 18%, and that the telecom operators were requested to pay up the duty in retrospect.
“Our earlier prices were calculated without the duty component. So now we are unable to recover that cost from consumers. This would also push up CDMA telephone prices significantly,” he added, highlighting that this would make the technology inaccessible to the lower-income segments.
Suntel urged the TRCSL and the ministries concerned to create a more equitable playing field in the telecom market highlighting that there was a “clear anomaly between the costs of importing a mobile phone and fixed phones.”

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