Sri Lanka removes voice call floor rate to improve cost optimisation and bolster competition

21 Aug 2018

The government of Sri Lanka has reportedly removed floor rates for voice call charges in the country, in a bid to promote cost optimisation and boost competition in the industry. The country first introduced floor rates for calls and SMS in July 2010 under the previous government after years of what analysts termed ‘bad policy decisions and regulatory inaction that led to a crisis in the industry’.

Online news portal Adaderanabiz quotes the Telecom and Digital Infrastructure Minister Harin Fernando as saying that the decision to remove the floor rates is targeted ‘at bringing more benefit to telecom users as well as companies’. The minister confirmed that the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has sent letters to Sri Lanka’s operators informing them of the change in terms, coming at a time when new Finance Bill amendments propose to increase taxes on the telecoms industry. The amendment also proposes a levy on short message services, charging LKR0.25 per SMS for all bulk advertising messages, payable by the advertiser. ‘The floor rates were implemented in 2010 to help the large operators. The new move will ensure cost optimisation by operators and will give hope for small operators,’ the minister told reporters. But from 1 February 2016, Adaderanabiz notes, under the new government, TRCSL introduced a new common floor rate for the Sri Lanka telecom industry, with the aim of creating a level playing field to enable small operators with a lower market share to be more competitive.

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