New SLT tariff benefits customers

The new tariff of Sri Lanka Telecom (SLT) has given benefits to customers and there is no overall tariff increase as claimed by some reports, SLT officials told the media on Friday.

SLT will incur a 9.03% revenue loss due to the new tariff structure introduced from November 1, 2007. Accordingly, SLT has introduced a time based or per second billing for domestic telephones.

SLT introduced the new tariff system to comply with the Supreme Court ruling to implement the time based tariff system and to reduce the rental, specially the business rental.

The Telecommunication Regulatory Commission directed the SLT to introduce the time based tariff system in 1999. However, due to technical reasons and the court case against the fifth tariff rebalancing of the SLT the implementation of the time based tariff system was delayed, they said.

SLT, the telecommunication market leader in the country is at a disadvantage in the highly competitive market as a result of being a government institution.

SLT has to follow very stringent procedures to get approvals for price revisions where other incumbent operators don't follow. In this situation the SLT is not competitive in the market. For instance we don't want to charge a higher rental from business customers. The new tariff structure was not what the SLT proposed, the officials said.

Prior to 2002, SLT had the monopoly in international telecommunications and the company earned 70% of its revenue from international operations. This profit was used to subsidise local call charges. In 2002, after the government opened the international communication market to competition the situation changed.

During 2002-2003 there was no revenue increase in the SLT. After a long TRC delay, SLT received approval for tariff rebalancing and this had to be done within five years and local call charges were increased.

However, the fifth tariff revision was challenged by a consumer organisation in the Supreme Court.

Officials said that to be on par with other operators the peak time was extended by one hour. The Rs. 1.50 start up fee is a common feature in the time based billing system and all countries and operators follow same.

GW