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Message: <blockquote data-quote="lkdood" data-source="post: 7892147" data-attributes="member: 92282">Sri Lanka's telecom regulator is enforcing floor prices  and interconnection rates form mobiles 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 was in  turmoil and losses made it difficult for firms to invest in expansion  and broadband services. "It is not the responsibility of a regulatory agency to ensure the  profitability of telecom operators," Rohan Samarajiva, a telecom policy  researcher and a former regulator in Sri Lanka and the US wrote in his  regular column on Lanka Business Online. "Yet, when every single operator in the country, including the incumbent  who used to make profits even under inefficient government management,  starts bleeding red ink, it is not possible for the government and the  regulatory agency to sit on their hands. "After years of bad policy decisions and regulatory inaction that led to  a crisis in the industry, finally, the government has started to act." Samarjiva said lack of inter connection regime was also an incentive to  smugglers of international calls. With no termination fees to be paid,  operators had no incentive to stop international call smuggler who used  their network to terminate in other networks. Bharti Airtel however warned that floor prices do not foster competition  of efficiency. "Worldwide in any country with multiple operators the policy of  forbearance is allowed, where operators are allowed pricing freedom,"  Bharti's head of mobile services Atul Bindal told a forum in Colombo  earlier in teh month. "This enables efficient operators to offer services at a competitive  rate and more importantly it allows customers to get affordable tariffs. "On the other hand floor pricing only rewards inefficiency and  inefficient operators." Though Sri Lanka has only five players, Bindal said some areas in India  had seven or more operators.LBOThe Telecommunications Regulatory Commission today  set minimum  prices for mobile phone calls.  Commission chief Anusha Palpita set a floor price of two rupees for   outgoing calls for all mobile networks from tomorrow.   According to the commission, the lowest current tariff is 25 cents per   minute.   “Last year, the mobile industry lost 23 billion rupees,” Palpita was   quoted as saying in news reports.    He added that it was the first loss for the cellular industry since   mobile phones were introduced in 1989.   “Excessive price wars between operators are partly to blame for this   mess. We are putting in floor prices at the request of operators to   reduce the losses,” he said.   Sri lanka's 15-million user mobile market is mainly shared between   Malaysia's Dialog Axiata, Dubai's Etisalat, Mobitel Lanka, Hong Kong's   Hutchison Whampoa and India's Bharti Airtel.   Palpita said the losses made it difficult to invest in new technologies   for network expansion and broadband services.Sundaytimes</blockquote>

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