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| Sunday, 12 December 2004 |
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Features |  |
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Telecommunications Regulator should regulate by Githanjana Gunewardena MP, Deputy Speaker of Parliament Communication today is playing an important role in reforming society at present. Telecommunication, beyond the audio-visible range is playing a bigger role, owing to its speed, achieved by the infusion of electronics and subsequently computer technology.
During the first tenure of my office as a Member of Parliament, I had the opportunity to be associated in highlighting a few sordid activities in the sector, detrimental to the national interest. One of them was a Telecommunications project in Anuradhapura where the report of the Auditor General exposed the fact that there was an overestimation and thereby an overpayment of 3.5 times the actual cost. The second was the infamous Mobitel deal where the strategic investor at that time had dumped his equipment. The subsequent events establish the truth of what I brought to your notice then. At that time the entire Telecommunication operations was a monopoly under State control. Today there is supposed to be a liberalised environment in the telecommunications market. The Regulator is the key to the growth and direction of the sector. Why did Sri Lanka take the trouble bringing in legislation namely Act, No. 25 of 1991, its amendment, Act, No. 27 of 1996, to convert the then Department to a Corporation to a Company and invite a strategic investor to buy 35 per cent of the shares and on top of it to offer the management to the strategic investor? Why did we first establish the Office of the Director General of Telecommunications as a Government Department and then a Commission with semi-judicial powers? The answer is to reform for the better. What is the hallmark of good performance in the provision of any goods or services? It is the timely delivery of the same, nationwide, at an acceptable quality, cost effective and efficient. I am wondering whether the Regulator in existence for about 13 years have given thought to it. The classic signs of apathy are reflected by an unsatisfied demand, poor quality and ever increase prices even with the availability of more than one operator. This is contrary to the expectations of some of the experts of donor agencies who predicted in 1995 that by 2005 a near zero tariff would be a reality, considering the downward trend in telecommunication charges. Liberalised It is traditional for all those concerned in telecommunications to blame the Government of the day for all the ills in the sector. Operators in Sri Lanka seem to want unrestricted freedom for their operations. It also appears that those who are in the Regulatory Authority want to perform their role unchecked and be not responsible to anyone. The clamour for independence to the point of not being a part of Sri Lanka shows the sheer disregard for basic principles. In a liberalised era, how do we reduce the communication divide? First, there must be investment into the sector. Secondly what is offered by the operators must be a good service. To ensure steady investment, there must be a transparent and predictable regulatory environment and the assurance of a good return on investment. A good service can be ensured through sustaining market competitiveness for the deliverance of the service nationwide in a timely, cost effective and of acceptable quality. The Regulator therefore has a vital role to play and I am fully convinced that except for a few minor modifications, the existing laws have all the powers for the Regulator to organise itself for the better. Scenario It is common knowledge that the so called experts viewed a scenario that every aspect of operations of any service being left in the hands of the operator with the Regulator sitting in an ivory tower. A few incidents around the globe, such as the railway accidents in Britain, provision of water services in Canada and Bolivia, power projects of India involving the infamous Enron were the costly prices the public had to pay for being guinea pigs of the experiments of the experts. Clearly the Regulator should identify what is public goods and what else are private goods in the sector. The big question of the day would be, is the Regulator performing well in the management of public goods in the sector. If it did so, then there would be a bounty of investment into the sector as return on investment for Telecommunication. An analysis performed on the Direct Exchange Lines of Sri Lanka, its usage and the cost to the subscribers reveals that over the years under study, namely 1999 to 2002, there was an annual reduction in usage of 6 per cent per cent and an increase in cost 18 per cent. Allowing even for a annual increase of the US Dollar value by 10 per cent the increase works out to 8 per cent in US currency. Therefore was the Regulator aware that the Communication Divide in the country was increased in the period under consideration? It is clear that in the United Kingdom the tariff per annum was reduced by 12.4 per cent per average and the usage increased by 15.6 per cent. I would like to ask all those in the Regulatory Authority who are known to travel right round the globe in the pretext of training, seminars and meetings, whether they are aware that statistics show that the Communication gap was reduced in the United Kingdom but in Sri Lanka it was increased? The minimum connection charge in Sri Lanka, that one has to pay outright is about Rs. 19,000. In Pakistan the connection charges in Sri Lankan Rupees is Rs. 1243.62 cts. in the urban areas and Rs. 829.08 cts. in the rural areas respectively. In Sri Lanka the connection charge for rural areas is much higher. The line rent in Pakistan in Sri Lankan Rupee equivalent is Rs. 288.52 cts. whereas in Sri Lanka it is Rs. 500 without tax. The minute charge in Sri Lanka is about Rs. 3.00 whereas in Pakistan one can speak about five minutes for the same amount. What does all this reveal? All round the costs are higher in Sri Lanka for the same technologies used. It is therefore clear that in Sri Lanka we pay much higher prices for equipment and pass the burden to the customers and the Regulator is completely inactive when he has all the powers to get down the books to examine. It happily keeps on increasing the tariff. It must also be stated that in the process of liberalising the Telecommunication sector, even countries like Japan the Government has some kind of holding in the form of shares and other controls of the operator that existed before liberalisation, namely the NTT. When the Telecommunication was under State control I brought to the notice of the then consultative committee of an over payment which I mentioned before. Today all the telecommunication operators are doing the same. The Banks too provide loans knowing very well that the price could be passed on to the customer without any trouble. The best deterrent to this practice is for the Regulator to be vigilant and not to allow the unwanted costs to be passed on to the public of this country and thereby increasing the communication divide. Very often history repeats. It is said that we have had weavers who deceived the rulers by weaving clothes only the wise can see. In Sri Lanka too we have had an individual of a foreign university who called himself a Professor and was appointed the Director General of Telecommunication. The Government of the day realised the truth and bid good bye to him. He showed his weaving skills to the successive Government only to be made the head of the Public Interest Programme Unit. In fact the acronym of that unit PIPU, really stands for Private Interest Programme Unit. He not only earned a monthly salary of USD 10,000 or more but got a University, to grant him an honorary chair in the Department of Civil Engineering, perhaps the only one of its kind in Sri Lanka to a non-engineer. I am at a loss to understand what he imparts to the budding engineers of this country. All what we know is that he was responsible for the existence of about 32 external gateway operators who are unable to interconnect to the established network thus throwing the interconnection regime into a chaos. The poor Air-conditioning technologist had no alternative but to say yes to this weaver. We cannot escape from the fact that interconnection of Telecommunication networks must be considered a public good. Expert opinion is expressed in having a separate national point of interconnection, operating independently of the licensed operators. I hope the Regulator, would have the courage and the skill to undo what was done by these weavers and Air-conditioning technologists towards the establishment of a proper interconnection regime. I am wondering as to whether skills of marketing soft-toys and stock-lots would help in this regard. Due to the faulty processes adopted by this weaver the much spoken Vishwa Grama Fund to provide funding for rural communication never came into being resulting in a loss of Millions of Rupees a day. The only hope towards the development of the Telecommunication sector is skill and the courage of the Regulator. Even at this late stage I hope the Authority will open its eyes and be receptive to the public needs. |
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As these have a greater influence in the well-being of society and the
growth of economy, its priority is as high as that of agriculture,
industry and education. Therefore it is my view that this sector should be
treated beyond the party divide and be reformed for the better.
