Mobile price war begins in Sri Lanka

Posted on July 6, 2006 / 15 Comments

LANKA BUSINESS ONLINE – LBO
Sri Lanka’s biggest mobile-phone operator Dialog Telekom Thursday slashed outgoing call charges by as much as 50 percent as the firm stepped up its expansion drive in the country.

Call charges within the network from 11.00 pm to 6.00 am will go down by 50 percent to 2.00 rupees, while rates for outgoing peak calls have been cut by an average 30 percent, officials said.

15 Comments

sam
July 6, 2006, 11:15 pm
Dialog is the ‘protector’ of phone users in Sri Lanka. Some times I wish even dialog have cables too.
Sena Siriwardene
July 7, 2006, 10:56 pm
Still, we have no luck for ridiculous incoming call charges it seems!!! Are there any other countries in this world where they charge for incoming calls as well?
Anonymous
July 8, 2006, 2:19 pm
USA, Canada, Singapore, Hong Kong, among others.

If you want the current debates on the subject:

http://www.econ.cam.ac.uk/cgi-bin/repec-wp.pl?series=camdae&filename=2004&paperid=0426
Sena Siriwardene
July 9, 2006, 12:48 am
Can TRC ask Dialog not to reduce prices anymore so that other operators will face unbearable losses? With Dialog’s loss will the others too reduce their charges? Will Dialog increase the charges once they get most of the other network users into their umbrella? Is this just yet another gimmik????
Samarajiva
July 9, 2006, 1:02 am
Why is it the responsibility of a regulator to safeguard operators from losses? Sounds more like the task of a cartel manager. The Act mandates the TRC to promote competition, not to stifle it.
samarajiva
August 12, 2006, 10:36 am
Mobitel, which appeared to have pressured Dialog into lowering prices, ups the ante, lowering prices of postpaid as well:

http://www.lbo.lk/fullstory.php?newsID=2124765175&no_view=1&SEARCH_TERM=5
Sandhya Herath
August 12, 2006, 11:35 am
Sena,

The free market is always harsh for the players. It is only advantageous to the consumers and not necessarily to every player. Those who use their brains (and might be with some luck) will succeed while many others fail. That is natural.

Thousands of young men who started software companies at the time Bill Gates launched his Micro-Soft in late 1970s are no where today. That is how market behaves. It never protects inefficient players. You cannot complain about that.

TRC is the regulator and should not have any reason to protect party A or party B, unless otherwise such protection is in the interest of the consumers.

Whether anyone likes it or not, mobile call prices are bound to go down. In India now one minute is Rs.1. (= LKR 2) In developed countries like Japan and South Korea, it is even cheaper. Sri Lanka too will be there before long.

As Gurcharan Das correctly says in his India Unbound, competition among even the most corrupted, most selfish companies is more beneficial to the consumer than regulators trying to control the market.

You can compare the university education system in SL (a govt. monopoly) against the university education system in India (now, largely dominated by privately owned universities). Who produces better graduates and why?
Harsha Purasinghe / හර්ෂ පුරසිංහ
August 12, 2006, 1:54 pm
Quite agree with comments of Sandhya. As per one of my indian friends how the prices of calls came to Rs.1/= per minute in India is just due to one of the key players aggressive action which at the end created chaos in the market where all others too had no choice but to reduce prices to Rs.1/=. So all the mentioned attributes & actions of operators become beneficial to consumers.

Also I am sure in future all phone calls will be free and providers may have to generate revenue through services. That’s obvious with amount of money operators around the world spent on data services and related licenses.

With Mobitel’s latest attractive post paid tarrif packages am sure there will be many surprises coming from other operators as well. Let’s hope all this will drive for the benefit of Sri Lankan consumer where we too end up with total incoming free irrespecitve of package/prepaid/post paid and also to have a flat rate something simmilar to India the likes of Rs1/= or 2/=.
Sandhya Herath
August 16, 2006, 11:59 am
AN APPEAL TO DIALOG

I have just heard from a friend in Mannar that Dialog has stopped its services there because if the security conditions.

My friend has shifted to Mobitel now.

I fully understand that Dialog cannot risk the lives of its employees in providing services in non-secure areas. However, if we strictly follow that argument, we in Colombo too should not have telecom, electricity or transport facilities by now.

This is an appeal to Dialog. Please reconsider this decision of moving out at this critical point and leaving your customers in the dark. The number of Dialog customers in Mannar might not be large to earn a profit, but like everyone else they too are your precious customers. They are also the ones who need to maintain relationship with their relatives most.

Dialog, please reconsider your decision. I am sure this is an excellent opportunity for you to show how much you care for your valued customers.

(I remember the FedEx ads that shows what difficulties they undergo to serve their customers.)

Will be grateful if Dialog can at least acknowledge this post.
samarajiva
August 19, 2006, 7:59 pm
I understand that Dialog Mannar is back in operation.

But is true that Jaffna Dialog and SLTL have been shut down?
Sandhya Herath
August 22, 2006, 8:28 am
Dialog is back in operation in Mannar.

Thank you Dialog for the quick response. You know how to take care of your customers.
Asarana VKS
August 22, 2006, 4:01 pm
Thank you professor Samarajiva for closing this blog about my misdeeds in handling lakgov funds. If standardizing sinhalese blog kept open, I would have been stoned to death by the public in this country,

Meeta, sada asarana VKS
shaheer
July 9, 2008, 3:57 pm
I need a hand phone for low price.
If it is a camera phone i like it very much.
pls try to help me
thanks
Virodara de silva
July 11, 2008, 4:19 am
Well done,Dialog Telekom.

we hope you will carry on your good work and slash the incomming call charges as well.

we know that you guys will loose your income,but still if you managed to boost your sales you can over come the loss.Other thing it’s not ethical as well to charge for a incoming call isnt it.

I cant recall any country who’s population is charged for their incoming calls.people laugh and i was embarsed once,when i took the matter up in a conversation with some of my friends.

anyway GOOD LUCK DIOLOG
Rohan Samarajiva
July 11, 2008, 1:36 pm
The United States, Canada and Singapore are among countries that charge for incoming calls. This is called RPP (receiving party pays). Professor Stephen Littlechild, a renown authority in regulation has argued that RPP is superior to CPP (calling party pays): http://www.theinquirer.net/en/inquirer/news/2006/05/23/ex-sparky-watchdog-attacks-ofcom

However, in the interests of convergence and making people happy, we are of the opinion that Sri Lanka should make the switch to CPP, so that we have the same charging regime for fixed and mobile.

But the decision maker here is not Dialog, but the TRC. The TRC has to order the change to CPP along with termination rates to be paid to mobile networks by fixed operators. It was about do so in 2003, but as a result of the takeover of the telecom ministry by President Kumaratunge, this was aborted at the last minute citing election concerns. Suggest that Mr de Silva writes to TRC asking for CPP.