Financial Times

Dispute once again over SLT Tariffs

By Natasha Gunaratne

Sri Lanka Telecom (SLT) may be hauled into court once again over its tariff structure following a fundamental rights petition filed by attorney-at-law Vasudeva Nanayakkara in July 2009.

Two other petitioners, former Dean of the Faculty of Engineering at the Hong Kong Polytechnic University Kowloon A.K. David and former Chairman of the Communications, Information and Media Committee of the Organization of Professional Association (OPA) Major General W.J.T.K. Fernando, filed the application citing the Telecommunications Regulatory Committee (TRC), its Director General and Chairman and the Attorney General as respondents.

No date has been set for hearing of these applications. The petition states that the TRC suppressed vital facts and deliberately provided disinformation to the Supreme Court, most likely to conceal the true rate in the decline in operating costs, following a Court order in 2007 for SLT to implement a 20-25% tariff reduction.

The petition states that the tariffs proposed by the TRC did not comply with the basic requirement of the order made by the Supreme Court that every user should benefit equitably. In order to comply with the equitable bill reduction as ordered by the Supreme Court, regardless of the pattern of usage, the call charges of each band should be determined analytically to satisfy the conditions which the TRC failed to take into consideration.

The petition further notes that despite the reduction ordered by the Court, the tariff proposed by the TRC resulted in an increase of nearly 30% in the overall call charges compared with the pre-November 2007 tariff. It was observed that in 10 of 15 distinct call charge, bands which fall into the off peak bands: i.e. economy and discount bands extensively used by the residential subscribers have encountered an increase in the call charges. The petition further states that if a significant proportion of calls in user bills are those of the off peak bands then the bill may be increased by approximately 30%. This is contrary to the Supreme Court direction that each user should benefit equitably.

The petition further stated that the pace of decline in operating costs (with respect to the Sri Lankan currency) since 1998 to date is approximately 9% per year. Hence the TRC's recommendation to curtail the reduction of the tariff from 20-25% as ordered by the Supreme Courts to 9.03% is misleading and unjust. Furthermore, this reduction of 9.03% is paltry as compared with the raise in the tariff to 247% some years back resulting from the suspension of the price cap clause in the SLT's licence at the behest of a senior official of the Ministry of Finance.

The petition states that another feature of the SLT tariff that took away the benefit granted by the Supreme Court order was the unjust start up fee of Rs. 1.50 (excluding VAT) applied to all the time bands namely peak, economy and discount, without a reduction to commensurate with the surplus capacity available during the off peak hours. These defeat the reduction of per minute charge ordered in the economy and discount bands. Such a start up fee had never been contemplated by the Supreme Court, the petition states.

The petitioners are seeking leave to proceed with the petition in addition to asking the Court to order the TRC and its Director General to hold a public hearing in terms of Section 9 and 12 of the Telecommunication Act in order to rectify the flaws in the prevailing SLT tariff expeditiously within a defined time.

The petitioners are further asking the Court to appoint a technical committee comprising experts in the field of telecommunication networking to evaluate the technical issues and guide and direct the public hearing.

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