Saturday, 3 August 2002  
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Cheaper IDD, mobile incoming free : New policy for better connectivity

Overseas phone calls will be cheaper, and incoming calls on mobile phones free under the government's new telecommunication policy currently under implementation officials said yesterday.

Under the new rules private sector telecommunication companies can begin to provide international direct dialling services and mobile service providers are allowed to operate fixed lines, they said.

The main thrust of the policy is increase the number of Sri Lankans who have access to telephones. This is an essential prerequisite to develop information technology and lay a solid foundation for the e-Sri Lanka project.

Kumar Abeysinghe, Secretary to the Ministry of Mass Communication told the Daily News yesterday that the new policy is being currently implemented and the authorities are working out the new licensing regimes.

Earlier in the week, the government's Economic Policy sub-Committee decided to establish a class license scheme for international telephone gateways and also decided not to limit the number of these licenses.

Lanka Telecom was the sole licensee but this monopoly ended on August 1. New operators of the gateways, which link Sri Lanka to the outside world, are yet to be licensed.

Abeysinghe said the new policy paper on the telecommunication industry is ready and will be published next week. Under the new policy there will be a free-for-all for the telecommunication providers and policy makers hope that this will result in lower costs for phone calls and the laying of a stronger base for greater connectivity. Sri Lanka Telecom, Lanka Bell and Suntel will continue to have the edge in this regard though, because their infrastructure is already in place and a new players would have to make heavy investments, said Ravi Abeysuriya industry analyst at Fitch Ratings Lanka.

He also pointed out that competition in the international dialling business will bring down charges as rates in Sri Lanka were higher than in most Asian countries.

The provision of domestic and international leased lines will also be freed of controls, Abeysinghe said. The Telecommunications Regulatory Commission will also investigate the de facto monopoly of undersea cables and find ways to end this situation.

This new regime runs the danger of encouraging these new private sector fixed line providers to concentrate in urban areas where the greater population density would ensure that the operator could earn more by investing less in infrastructure. To mitigate that the government says it will offer a World Bank subsidy to operators who wish to set up lines in low population density rural areas.

The new policy will also allow mobile operators to enter fixed line operations and vice versa. This too is aimed at cutting costs for the consumer as phone companies can fix rates that are more competitive.

Licensing in this sector will be regulated in a manner that they are also encouraged to provide these services in rural areas, Abeysinghe said.

Changes are also being made to ensure that incoming calls on mobiles will be free. The experiences of other countries has shown that there is a strong growth in mobile phone usage when this comes into effect, Abeysinghe said.

Mobile phone connections have been growing at around 50 per cent per annum over the past three years.

Sampath Bank

Crescat Development Ltd.

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