Telecom and Digital Infrastructure Minister Harin Fernando had told reporters that the move is targeted at bringing more benefit to telecom users as well as companies. Meanwhile reports note that letters informing of the changes were sent to all the operators by the Telecom Regulatory Commission of Sri Lanka (TRCSL) last week. Minister Fernando had further told reporters that the move will result in cost optimization and allow more competition in the industry.
The move comes at a time when new Finance Bill amendments proposed to increased taxes on the telecommunications industry. In case if new amendments are approved by Parliament, the amendment will charge a levy of Rs. 200,000 per annum for each tower from 1 January 2019 for all mobile telephone operators who own cellular towers compared to the previously proposed Rs. 200,000 per month charge. The amendment also proposes a levy on Short Message Services, charging 0.25 per SMS for all bulk advertising messages, payable by the advertiser.
“The floor rates were implemented in 2010 to help the large operators. The new move will ensure cost optimization by operators and will give hope for small operators,” Minister Fernando had told reporters.
But from 1st February 2016, under the new government and new government’s minister TRCSL introduced a new common floor rate for the Sri Lanka telecom industry. That time it was termed by TRCSL officials that the idea is to set a new minimum rate creating a level playing field for all operators that will enable small time operators with a lower market share also to be competitive.
That time under the circular issued by TRC, Short Messages (SMS’) was increased from the current cents 10 to 20. In addition call charges within the same network between two subscribers was increased by cents 50. (Rs. 1.50) and it was for post-paid users (on per minute billing.) In the pre-paid segment, a call made to a different operator was reduced from then Rs. 2.50 to Rs. 1.80 per minute. And for the pre-paid users with the network the tariff was increased from Rs. 1.50 to 1.80 per minute.
Sri Lanka first introduced floor rates for Voice Calls and SMS in July 2010 under the previous government in a bid to help large operators according to analysts, whilst that time it was termed by telecom industry experts that the introduction of floor rates came into effect ‘after years of bad policy decisions and regulatory inaction that led to a crisis in the industry’. That time initially under then government in June 2010, the telecom regulator Telecommunications Regulatory Commission of Sri Lanka (TRCSL) announced that the previous Sending-Network Keeps All (SKA) regime was being replaced by a mobile termination rate regime, with the termination charge being set at 50 cents a minute for a call and 15 cents for an SMS.
Then in July 2010 TRCSL announced that a floor price of Rs. 2 per minute will be set for all voice calls, excluding those covered by previously sold packages.
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