Tariff Dilemma

May 27, 2014 (LBO) – Sri Lanka’s telecom companies have to share networks and invest together to cut broadband costs as higher margin voice usage gives way to cheaper data based services, head of Dialog Axiata, the island’s largest mobile firm has said. Dialog group chief executive Hans Wijayasuriya said Sri Lanka has been recognized among the lowest priced broadband markets in the world even by the International Telecommunications Union but costs were higher than revenues.

He said “the capability of the sector to deliver economic returns to shareholders
in real terms, may be at risk in the medium term” unless costs were cut fast and prices raised.

“The portfolio of strategies and policies required to guide the sector through the challenging period of Voice to Data Conversion, would … need to target the restoration of margins and profitability of Data and Broadband services,” Wijayasuriya told shareholders in the firm’s latest annual report.

“We believe that the principle policy frameworks required to secure data profitability would feature among others, the encouragement of¦ network sharing and collaborative investment, in tandem with the enforcement of a rational and cost based pricing environment capable of meeting the dual objecti