Sri Lanka Mobile Operators Say Industry Competitive

Sept 09, 2008 (LBO) - Sri Lanka incumbent mobile operators say the industry has healthy competition and are denying claims by new rival, India's Airtel that anti-competitive practices in interconnection are keeping prices high.

Sri Lanka's Dialog, Hutch, Mobitel and Tigo says the country's mobile penetration reached 38 percent at the end of 2007, which was nearly double that of India's 20.5 percent due to competition and good regulation.

They say the industry has achieved 70 percent geographic coverage and 90 percent population coverage.

"Competition has been healthy and delivered not only successive reductions in pricing levels bringing mobile telephony within reach of all segments of Sri Lankan society, but additionally quality services and advanced technologies well ahead of the region," the four operators said in a statement.

Airtel, has been quoted in media reports as saying existing mobile operators have not given interconnection (rates paid by operators to each other for delivering a call from another network to its own customer) to Airtel on the same terms as practiced among themselves, the mobile operators said.

Airtel is to start operations this year.

Mobile operators say interconnection is based on a 2003 rules issued by the regulator.

A new cost study has been started by the regulator to determine new rates.

Operators say a recent study conducted by Nokia, a handset maker, in 80 emerging markets has found that the cost of owning a mobile phone in Sri Lanka is among the lowest in the world.

In Sri Lanka average revenue per user is below 4.50 US dollars compared to India's 6.00 US dollars, the operators said.

Sri Lanka's progressive regulation had helped it to be the first country in South Asia to deploy GSM (global system for mobile communications) services in 1995, GPRS (general packet radio service) in 2001, 3G (third generation) in 2006 and 3.5G in 2007.

"As strong believers in competition and the resulting dividends to consumers and market growth, Sri Lanka's mobile operators welcome additional competition," the operators said.