Sri Lanka telecenter connectivity story 1: Not an infrastructure issue always…

Posted on December 21, 2008 / 6 Comments

Ambuluwawa, about 1,100 m above sea level, is probably the highest point in the vicinity of Gampola. Not surprisingly, all telecom operators exploit the geography. Transmission stations/towers encircle the summit. (See above) That is what one calls infrastructure.

Just 10 km away, Sirimalwatte Ananda thero, a young and energetic Buddhist monk, runs a Nenasala, a telecenter established under the World Bank funded e-Sri Lanka program. He is not content with the Internet facilities. He pays Rs. 11,250 (about USD 100) per month for a 128 kbps link of inconsistent speed. This is twice more what a user in Colombo pay for her, not 128 k but 2 Mbps link – from the same operator.

Use simple maths. Ananda thero pays THIRTY TWO (32) times more per kbps than a user in Colombo. Why such a large gap? Don’t tell me lack of infrastructure is the culprit.

6 Comments

ISP
December 22, 2008, 8:37 am
An operator has to travel a long distance to provide connectivity and for maintenance issues. This is why we want more money.
maharajah of bad
December 22, 2008, 2:27 pm
ISP – Pls provide this dude a detailed break up of the costs, he’s obviously not been to Business school.

And learn Asia,
We operate in a market system driven by profit, maybe you ought to vote for the communists next time….
Chanuka Wattegama
December 23, 2008, 7:38 am
[An operator has to travel a long distance to provide connectivity and for maintenance issues. This is why we want more money.]

Really? I wonder why there aren’t separate mobile pricing schemes for provinces then.

[We operate in a market system driven by profit, maybe you ought to vote for the communists next time….]

Nobody ask free and subsidized services. Offer a fair deal. What other service costs 32 times in Gampola than in Colombo?

As for markets: All Nenasalas are bound to 128 k by ICTA, which covers the bill fully the first year and then go on reducing proportionately. Operators were selected in a pseudo-competitive process (3 were selected instead of one) to provide services in bulk which ICTA ‘re-sells’ to Nenasalas after the first year. Nenasalas are not free to select their own operator.

Is that what you call a market? It seems to me more like creating scarcity.

Well, just yesterday I discovered the opposite of this story. It will come shortly. Then we can discuss both.
Megaline
December 23, 2008, 8:32 am
First all nenasala connections were given to elektroteks abey for a huge cost and they say al connections worked well. later icta gave it to three operators (slt, dialog, lankacom) and some of the outstation connections worked only for few months but the isps stil get money for connections according to ‘stories’. icta can correct if i am wrong. is electortecs still providing nenasala connetions?
Chanuka Wattegama
December 23, 2008, 9:14 am
Electrotek is out. But you still can see the abandoned VSAT dishes in many Nenasala tele centres. Electrotek has not even bothered to take the equipment – presumably fully covered within one year service charges.

If I remember correctly, the deal was Rs. 90 million (USD 900,000 then) to provide VSAT links to 100 Nenasalas. Amounts to Rs. 75,000 (USD 750) per month per tele-centre. Perhaps the world’s highest tele-centre connection charges ever.

As Milton Friedman correctly put it, there is no incentive for anyone to take extensive care when spending someone else’s money to a third party.

But forget history, lets see what we can do now.
Megaline
December 23, 2008, 9:40 am
Did the existing trio (slt/dialog/lankacom) do suffiencent fled survey before commiting to outstation nenasalas? how can the president go on saying that 500+ nenasalas are operating and new ones are being opened at a time many of them are either closed or with no internet access?