The Telecommunications Regulatory Commission’s (TRC) claims that Sri Lanka’s telecommunication industry has the lowest tariffs in the Asian region, is unsubstantiated, a telecommunications specialist says.
“The claim by the Director General of the TRC Mr Priyantha Kariyapperuma that Sri Lanka 's telecommunication industry offers the lowest tariffs in the Asian region is unsubstantiated,” a telecom specialist, who declined to be named, told the Sunday Financial Times.
He says SLT’s tariffs, particularly the latest tariffs under the ‘Vtalk’ options, are also contentious.
“It is because although the package offers a reduction in per-minute charges, it eliminates the free-call allowance. Furthermore, the V Talk advert implies that it is better than the current tariff or that Vtalk is much less than the pre-November 2007 tariffs by more than 9% - the reduction the Supreme Court ordered in respect of the current tariff, compared with that of the pre-November 2007,” said the telecom expert.
A comparison of the rental and call fee allowance of “VT Active” one of the packages of Vtalk, with pre-November 2007 tariffs, shows the difference. “The reduction of the call free allowance of “VT active” to zero, creates a significant loss amounting to Rs 610 to the user. The call charge reduction required to compensate for this high loss is no match with the minuscule call charge reduction of the Vtalk,” said the telecom expert.
For instance, for a typical call bill of Rs 650 i.e. without rental and call free allowance is considered, then the final bill in 2007 will be 650-600 + 485 or 535. If the VT Active call charges are not reduced, the final VT will be 650+ 495 or Rs 1,145.
Thus, to maintain a bill unchanged, the VT call charge should be reduced by Rs 1145- 535 or Rs 610, as shown in the table. That means the call charge of Rs 650, should be reduced to Rs 650 to 650-610 or Rs 40. Percentage wise it is a reduction of 610/650 or 93 %
So if the bill of VT Active is to be reduced, then the call charge reduction should be more than 93%. For example, if the bill reduction is to be 9% or the same as the current tariff, the actual VT call reductions should be 93 +9 % or 102%.
But the actual VT Active package call reductions are much less, says the expert, and the reductions are only in respect of call charges in the peak (band) time.
“All other call charges in the economy and discount bands are increased in some instances by nearly 100%. For instance, in VT Active, the actual call reduction for SLT local calls to Own Network is around 17% during the peak hour. If a majority of calls billed are of the above type, then the bill will increase by 76 % (93 - 17). If the bill also contains calls outside peak hours, with hikes, not reductions in call charges, then the final bill will increase by more than 76% and therefore, will be much worse than the current tariff ,” he explained.
“If the DG of the TRC sincerely believes that tariffs have been reduced and are now the lowest in the region then in compliance with the key regulatory norms of transparency, he should publish on the TRC website and in the news papers, the data and the methodology of analysis for claiming that the tariff in Sri Lanka is the lowest in the region and , the guaranteed bill reductions of each approved V Talk package,” he said.
The telecom specialist says that considering the crucial role of the customer in market reform, the Director General of the TRC should convene a public hearing to seek the views of the public on critical issues weakening market competitiveness, such as the flaws in the current tariff, and interconnection and seek views on opening of the wire based ADSL service, which is yet the monopoly of SLT, and on setting up of sector specific public goods, such as number portability platforms.
Responding to the allegations, a TRC official said the TRC stands by its claim that Sri Lanka offers the lowest tariffs in the Asian region. “In Sri Lanka we offer tariffs as low as Rs 2.00 per minute. So we can say Sri Lanka has the lowest tariffs in the region,” said the TRC official.
The TRC official said the current tariffs offered by SLT were agreed on by the Consumer Association and SLT and that the Vtalk package is an optional package. “Consumers have a choice of using the existing tariffs and not going for Vtalk, depending on what is convenient for them. Vtalk will not replace the existing tariffs, but now consumers have more choice,” said the TRC official.
The TRC said it did not publish the data and the methodology of analysis for claiming that the tariff in Sri Lanka are the lowest in the region, because of confidentiality reasons.