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By Channa Kasturisinghe

For the first time in the 122-year history of telephony in Sri Lanka international telecom services will be opened to competition from February, paving the way for a drastic reduction in international call prices.

The Government yesterday announced that it would start issuing from next month an unlimited number of external gateway operator (EGO) licences allowing competitors to enter this important market segment.

"The entry of competitors into the international telecom services market will significantly reduce international call prices and make it easier for approximately two million Sri Lankans working and living abroad to keep in touch with their families," Minister of Mass Communications Imthiaz Bakeer Markar told the media in Colombo yesterday.

He said the EGO licences that will be finalised at the end of a seven-day comment period which starts today will include provisions to ensure maintenance of quality standards and price transparency.

Ministry Secretary Kumar Abeysinghe said that applications for the new EGO licences will be accepted by the Telecommunications Regulatory Commission (TRC) from February 3.

"The licence fee is the Sri Lanka Rupee equivalent of US Dolars 50,000. Licensees will be subject to an annual payment of 0.3 percent of annual turnover," Abeysinghe said.

He said that the Government will also launch a new program called `Viswa Grama' (World to the Village), to ensure the availability of modern communication facilities throughout Sri Lanka, particularly in the villages that have not been well served by the existing telecom providers and policies.

"A levy placed on each incoming international minute will be channelled in an accountable and efficient manner to service providers who actually serve the rural areas.

Under this program a Network Contribution of 0.06 (or the equivalent of Rs. 6 approximately) will be levied per incoming minute of international calls.

The Viswa Grama contributions will be disbursed through the Information Infrastructure Development Fund in the Ministry of Finance to domestic operators who have actually provided new rural fixed telephone connections or increased mobile coverage in rural areas. Approximately one-third of the Viswa Grama funds raised through international incoming calls will be spent on smart subsidies for network rollout under the e-Sri Lanka Initiative," Abeysinghe said.

He said with the focused flow of Network Contributions from international calls to rural network development more of these families will be able to gain access to phones and keep in touch with their loved ones.

"Businesses that create employment through international trade will benefit from improved choice and lower prices.

Approximately one-third of the receipts will be spent on smart subsidies for the new multi-service platforms that will be constructed in the currently underserved rural regions of Sri Lanka as part of the e-Sri Lanka initiative.

The Information Infrastructure Development fund will be overseen by a public-private advisory committee and will be managed by a development bank," Abeysinghe said.

He said the new EGO licences will be published in draft form at www.trc.gov.lk website.

"Newcomers, as well as current fixed, mobile and other telecom operators are eligible to apply for EGO licences.

The new licences will include provisions to ensure maintenance of quality standards and price transparency. EGOs will be required to obtain links from the current facilities-based operators to connect to the domestic networks, but will not be allowed build their own telecom facilities other than the gateway and related facilities.

EGOs can offer wholesale international origination, termination and transit services from the date of the issuance of licences.

They will be able to offer retail international origination services using international short codes by June 2003, after the auction of international short codes and the necessary modifications to the exchange facilities.

The auction will allow for the fully transparent assignment of short codes that will best reflect the economic value operators attach to them and preclude the abuses likely to characterise administrative assignment," Abeysinghe said.

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