Sri Lanka: Roadblocks to convergence strategy

Posted on October 31, 2008 / 4 Comments

It appeared that convergence was high on the agenda of Sri Lanka’s telecom operators. SLT introduced IPTV and Dialog put together a whole set of services including a satellite TV service and purchased a terrestrial license as well. There was talk of mobile TV being introduced.

The new TV regulatory regime introduced surreptitiously as regulations under an archaic 1982 Act will to put a stop to many of these plans, if the government manages to defend it from its many opponents and the difficult-to-predict Supreme Court. Dialog for example may have to exit the satellite and terrestrial TV businesses altogether, because only public companies with majority Sri Lankan ownership can even apply for these licenses.

Even if one can apply, the issuance of the license is at the discretion of the Minister. He may also exercise broad discretionary powers to suspend, cancel, or renew/not renew licenses once granted. And unprecedentedly, the duration of the license is one year. So those who get these pieces of paper will have to be very confident about their friendship with the Minister or the President before they make significant investments.

Five of the major telecom operators are majority foreign owned, so it appears that their only option will be to allow majority Sri Lankan owned license holders to provide services over their networks. In the case of Dialog, they have to apply for a new license by November 10th, 2008, which does not even leave them time to restructure the TV business units. This may mean an enforced firesale, which sends a terrible signal in terms of foreign investment.

Of course, there is the alternative of ignoring the whole thing. There is no mention in the regulations or in the parent act about the offense of engaging in TV broadcasting without a license. And absent a definition of broadcasting, it may be possible to argue that the cable headend or the satellite uplink is not a TV broadcasting station, which is the anchor for all the definitions.

4 Comments

Sanjana Hattotuwa
November 1, 2008, 2:00 am
Dialog has terrestrial TV?
Rohan Samarajiva
November 1, 2008, 3:06 am
Yes, a license was purchased.
Rohan Samarajiva
November 2, 2008, 10:40 pm
Related coverage from an interview given to Namini Wijedasa: http://srilankareports.wordpress.com/2008/11/02/placing-media-at-the-mercy-of-idiot-ministers/
Rohan Samarajiva
November 6, 2008, 12:49 pm
Victor Ivan writes about the license in question: “During the latter part of the Chandrika regime, the head of the Telecommunication Commission, had obtained a transmission licence in his name. Before he left this post, he sold this licence to Dialog for a sum of US $ 5 million (Rs.500 million).” http://www.montagelanka.com/?p=541

Worth checking out, perhaps? The actual sum paid for Asset Media is in one of the Annual Reports. What the Annual Report does not contain is information on who owned Asset Media.

Not that I blame Dialog for buying it (or suggest in any way that their investment made in good faith should be expropriated). I do not similarly blame SLT for buying a WiMAX license given to some unknown entity under this President. They had no alternatives.