Bharti objects to Sri Lankan mobile phone tariff

Bharti Airtel has petitioned Sri Lanka’s Supreme Court to stop a new minimum mobile phone price plan announced by the telecom regulator, an official said today.

The Telecommunications Regulatory Commission on Thursday fixed a floor price of two Sri Lankan rupees per minute for outgoing calls on mobile networks, after two years of stiff competition plunged the industry into massive losses.

The regulator said mobile phone operators reported a combined loss of Rs 23 billion in 2009, for the first time since cellular phones were introduced to Sri Lanka in 1989.

Airtel, the fifth entrant in Sri Lanka’s five-player mobile market, believes the floor price was against consumer interest, its corporate communications chief Yohan Munaweera said.

Petitioning the Supreme Court on Friday, Airtel said a floor price “will only help the market leader and maintain the status quo at the expense of the consumer.”

Prior to the watchdog’s ruling on Thursday, the cost of making mobile phone calls had fallen to 25 Sri Lankan cents per minute, the regulator said.

In its petition, Airtel, which began operations in January 2009, said unless a new player offered cheaper call rates “any newcomer will not be able to attract subscribers.”

Besides Airtel, the island’s 15-million user mobile market is mainly shared between Malaysia’s Dialog Axiata, Dubai’s Etisalat, Mobitel Lanka and Hong Kong’s Hutchison Whampoa.

The telecom regulator, Anusha Palpita, was not immediately available for comment, but he told AFP last Thursday that losses made it difficult for mobile operators to invest in new technologies to expand their network.

Regional technology think-tank LIRNEasia said while a floor price could steady cashflows, the absence of a competition regulator had forced the government to step in.