Floor Plan

July 14, 2010 (LBO) – Sri Lanka’s telecom regulator is enforcing floor prices and interconnection rates for mobile phones from July 15, ending a price war that has put the industry deep in the red, though concerns remain. Sri Lanka had a ‘sender keep all’ regime for mobiles where all the revenue could be kept by the originating network. From July 15 operator will have to pay 50 Sri Lanka cents for each voice minute terminated in another network and 15 cents per text message.

The regulator is also enforcing floor rates.

“We have a put floor rate of two rupees for off-net calls and one rupee on-net calls for new customers,” Indrajith Handapangoda, deputy director – competition at the Telecommunication Regulatory Commission of Sri Lanka told LBO.

“This is for new customers and the existing customers can continue with their existing tariff plans.”

The market is shared between Dialog Axiata, Etisalat, Mobitel, Airtel Lanka and Hutch.

An intense price war started with Mobitel, a firm connected to state-run Sri Lanka Telecom giving a cut price tariff plan to state workers, ahead of Bharti Airtel’s entry to the island as the fight player. The competition however has made players leaner, but the industry