Sri Lanka: Restricted usage = more revenue? Do we miss something?

Posted on July 26, 2008  /  1 Comments

This is from Lankadeepa online. It quotes Prime Minster Ratnasiri Wickramanayake saying one reason of restricting CMDA phones to be used only in one address (registered one) is to prevent the loss of government revenue from international traffic. He was responding to a query by Chief Opposition Whip Joseph Michael Perera MP at the parliament.

Sri Lanka uses CDMA technology for fixed connections but with signals available anywhere within local loop, or if not been blocked by the operator even outside, it can be converted to a ‘mobile’. Given the distinct sharing behaviour we have seen at BOP, many may use their CDMAs in multiple locations. (eg. Guides at Udawalave park use them as car phones). New laws can bring the usage down, unless present non-owner users purchase their own immediately, which is unlikely. This will make government revenue (as tax) less and not more – unless we miss something.

1 Comment

  1. The Opposition Whip read out a prepared speech. It was well constructed and based on evidence brought to public debate by LIRNEasia.

    The Prime Minister also read out his response from a piece of paper. He must take responsibility for the veracity of the statements he makes in Parliament, but in view of his advanced age and obvious unfamiliarity with the subject of telecom, we will assign blame to the people who wrote his response.

    It is not true to say that the use of a CDMA phone in two locations deprives the government of any revenue, international or local.

    It should be clear to anyone that local revenues can only increase by the phone being used in multiple locations, with more incoming calls being answered (an unanswered call generates no revenue) and more outgoing calls being made because the phone is accessible. The government takes 26% of every rupee spent on telecom. The more people spend on telecom, the more the government makes.

    The Prime Minister’s speech writers are also misinformed about international revenues. Yes, there is a levy on incoming international calls, but that levy does not (should not) go to support Mr Wickramanayake’s activities as Prime Minister. They go to a dedicated universal service fund which is supposed to be spent on making telecom services available in rural areas.

    Yes, if unregistered phones with no identifiable owners are widely available, the chances are high that those phones will be used for illegally terminating international calls into the Sri Lankan network of networks, depriving the telecom operators of their international termination fees and the universal service fund of the amounts due.

    But no one is actually saying this is a problem with the 2 million or so CDMA phones. This concern has been expressed only regarding the 8-9 million mobile phones. And in any case, this is a minor issue that cannot be remedied by requiring every mobile owner to carry a receipt or by prohibiting people from using CDMA phones in multiple locations.

    So, yes, something is missing: an intelligent and fully informed response to a legitimate question from the Opposition.

    We cannot blame the poor Prime Minister for this. Will someone designate a knowledgeable Minister to answer telecom questions in Parliament? There is a Minister in charge of the subject of telecom but since he does not have the TRC under him, I guess he refuses to answer questions related to that agency’s mistakes.

    So here we are: the most dynamic sector of the economy is an orphan with no one to speak for it in Parliament.