Net Billing

Oct 29, 2008 (LBO) – Sri Lankan fixed access provider Lanka Bell said it would pay subscribers that receive overseas calls 50 cents a minute, setting the stage for competition in the incoming call business. Corporate users would also benefit substantially by making Lanka Bell their choice for incoming IDD calls, Samarasinghe said. Under an global arrangement an operator in the originating country pays the company that delivers the call to an end customer, a termination fee.

Such in-payments at one time formed the bulk of developing country telecom revenues. At one time Sri Lanka Telecom, the island’s incumbent, which had a monopoly in international traffic earned about 80 percent of its total revenues from such fees.

Ten years ago the ‘termination rate’ was about 20 times or more than the actual cost of carriage of an international telephone minute through undersea cable or satellite.

The artificially high termination rates also sparked an active call smuggling business.

Since 2003, termination rates have fallen steeply from more than a dollar a minute to just a few US cents, making foreign calls as cheap as local calls or ‘distant independent.’

Lanka Bell said it was ‘passing on’ s