Sri Lanka proposes common firm to take-over telecom backbone, towers taxed in budget 2016

ECONOMYNEXT – Sri Lanka is to create a common user backbone firm under a state agency to take-over fibre networks, towers and spectrum, while each telecom tower will also be taxed at 50,000 rupees a year, a budget speech for 2016 said.

"I propose to form a special purpose company under the Information and Communication Technology Authority (ICTA) to bring about sharing of telecommunication resources efficiently and to protect air waves and the environment," a budget speech said.

"All the fiber optics owned by telecommunication companies and other authorities including the Ceylon Electricity Board, Road Development Authority and Sri Lanka Railways as well as spectrum and mobile towers are to be brought into this company."

The budget speech did not specify whether the assets would be expropriated to the state, or they would continue to be jointly owned and managed by a privately owned firm.

Telecom infrastructure become obsolete swiftly and needs massive capital injections every four or five years to replace and they also need to be maintained.

At the moment individual firms spend billions of rupees to install and maintain backbone infrastructure.

Though there are tested regulatory methods to promote joint use, Sri Lanka’s Telecom Regulatory Commission became dysfunctional during the ousted Rajapaksa regime as it was kept as a subject coming under the President, according to industry analysts.

The budget also proposed a 50,000 rupee annual fee per tower due to a ‘negative environmental impact’. Already competition and costs are encouraging the sharing of telecom towers.

It is also not clear what spectrum the budget is referring to, whether it refers to micro-wave backbone between towers or last mile spectrum reaching customers.

At one time the TRC had a robust stakeholder and public consultation process, which went in to dis-use with the agency coming under the President. (Colombo/Nov22/2015)

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