COLOMBO (EconomyNext) – Sri Lanka needs more network sharing to cut operating costs and higher broadband tariffs to make the services viable, Dialog Axiata, the island’s largest mobile operator said as global innovations reduced voice and text revenues.
"It is of particular concern that today broadband pricing appears to be sub-cost and to be subsidized by Domestic and International Voice Services," Dialog Chief Executive Hans Wijayasuriya told shareholders in the annual report.
"The resulting cost vs revenue formulation is both precarious and foolhardy in the context of the very real risk of voice revenue erosion ahead."
Wijayasuriya said Over The Top (OTT) operators were beginning to offer global voice, data and video services either at low prices or free with advertiser support, reducing the traditional revenues of telecom operators as they boosted broadband speeds with new investments
"The early symptoms of such an avalanche are in fact already evidenced in Sri Lanka’s Telecommunications Sector featuring in the main the depletion of International Termination and IDD revenues, mutation of voice revenue growth and a declining trend in SMS revenues," Wijaysuirya said.
"Once onset, the wave of transformation is seldom linear and could be envisaged to be exponential and hence catastrophic in consequence unless managed with proactive navigational strategies.
Extra-national OTT services could also reduce state revenues or the control rulers have over citizens.
"The ‘OTT’ nature of disruptive communication services applies not only in the context of Telecommunications Infrastructures – whereby services eroding traditional revenues are provided “On Top Of” the very telecommunications infrastructure which they disrupt, but also in the context National Regulation and Sovereign jurisdictions." Wijayasuriya said.
"OTT services most often by-pass national telecommunications and media regulation and furthermore are seldom subject to taxation at a national level."
Analysts and freedom advocates however say any inability of elected and unelected ruling classes of nation-states who practise the concept ‘state sovereignty’ to control or rob the freedoms of citizens would result in an expansion of the sovereignty of the individual.
They say people who propose more ruler intervention or regulatory control on citizens or companies to get protection from competition or innovation will have to be prepared to face the consequences.
Dialog itself got into hot water with Sri Lanka’s new regime over attempts to control content over its distribution network.
Sri Lanka’s new has proposed a series of new levies on the telecom sector which has been described by the opposition as revenge taxes, but turnover taxes for broadband was lower than voice in the past.
Dialog Chairman Azzat Kamaludin said the group contributed 24.4 billion rupees as direct and indirect taxes.