Investment is not like charity. One does not just give investment. If Tata is to invest in Bangladesh’s 2.4 percent market share Teletalk, it will have to have answers to the following questions: 1. Will it get a controlling interest in the company?
Usually, these are not subjects that are seen as connected. But I connected them at a talk I gave at the Colombo Club today. When the losses in one year from one SOE that serves a limited clientele are almost double the total spent on the social safety program that touches over one million families, it is not a difficult case to make. My slides are here.
Yesterday I gave the keynote address at the University of Colombo MBA Alumni Association conference. I covered global value chains, need for trade agreements and the problem of state-owned enterprises. The slides are here. Here is some of the media coverage. “I believe that Samurdhi is an important infrastructure.
It appears state-owned enterprises (SOEs) have risen in salience in Sri Lanka recently. I am giving a keynote address on this topic at the launch of the Advocata Institute. The slideset that I will be using is here. The day before yesterday, I was debating on a TV talk show what should be done with the least defensible of the SOEs, the renationalized SriLankan Airlines and the misbegotten Mihin Lanka. It is interesting that the successful reform that I was associated with, telecom, keeps coming up in these discussions.
BSNL is on life support courtesy of the Indian taxpayer, whatever fictitious paper profits it conjures up. The authors of a recent op ed in Hindu Businessline see through the fiction. The government firms had their own share of sops such as (i) year-ahead early start in the assignment of both 3G and Broadband Wireless Access (BWA) spectrum in 2009 and (ii) reimbursement of about Rs. 10,000 crore of licence and spectrum charges during 2001-06, as part of commitment to BSNL corporatisation. However, the 6.
It has been reported that the CEO of Yatanarpon Teleport, until now believed to be 100% government owned, has stated that is company has been privatized, with the government now holding only 5 percent of the equity. However done (auction or negotiation), privatizations are not this secret. The fact that no one seems to know who the owner(s) of the 95 percent of the company are adds to the mystery.
Sri Lanka and Pakistan partially privatized their incumbent fixed telecom operators more or less at the same time competition was introduced. India, Bangladesh and Nepal did not. Bad move. The lumbering monsters could not compete. The sad state of the Indian incumbents who have been fed more subsidies than it is possible to imagine is thus described.
I had treated the claims by the Secretary General of the ITU that the ITU had facilitated the telecom boom with mild amusement. But in the context of the upcoming Dubai WCIT, amusement is not perhaps the best reaction. Let us begin with the actual claim on the ITU website, more nuanced than that of the Secretary General: While the ITRs were a compromise at the time, they turn out, in retrospect, to have been instrumental in facilitating continuing privatization and liberalization of telecommunications markets. These trends were further facilitated by agreements made in the Global Agreement on Trade in Services in 1994 (Annex on Telecommunications) and in 1996 (Reference Paper on Basic Telecommunications Services). The ITRs contained a key provision in Article 9, Special Arrangements.
Reports are coming out about the Myanmar government’s plans for the telecom sector. Sadly, little seems to have been learned from the rich experience of the past two decades. Why otherwise would there be an interest in maintaining 51% ownership of the new operators? More interesting is the line about developing a national backbone. Are the rules for open access being drawn up?
When one only reforms only a part of an interconnected sector, the unreformed parts start to atrophy. Because of union resistance and the perception that the post was not that much of a money maker to start with, the hitherto conjoined posts and telecom were bifurcated and reform efforts focused on telecom. So 30 years after bifurcation, what has happened to the post, saved from from the depredations of foreign capital and World Bank advice? Sri Lanka’s state-run postal service lost 3.0 billion rupees in 2010 up 22 percent from a year earlier, while revenues fell 6.