Management Discussion and Analysis

Regulatory capital

The Sri Lankan telecommunication industry is heavily regulated. There exists several authorities covering areas such as spectrum allocation, roaming charges, consumer rights, copyright, data protection, cyber security, and the wholesale fees that operators charge each other. These regulatory measures are in place to protect consumers and the industry. There have been some regulatory requirements that have hindered the development of the sector. When there are such measures, the telecommunication operators voice their issues with the relevant authorities. These lead to fruitful discussions and favourable amendments.

These regulations are important for a multitude of reasons. They facilitate relationships between different operators and contribute to the maintenance of technical compatibility. The fair pricing of services is ensured and anti-competitiveness is singled out. Finally, “universal service” is achieved; whereupon the greatest number of households are connected to the network.

Our market is regulated by the Telecommunications Regulatory Commission of Sri Lanka (TRCSL); which is a fully-consolidated Government entity.

Regulatory licensing

Licensing is an important component of regulatory measures, as it authorises an entity to provide services or operate facilities. A telecommunications licensee is permitted to provide a distinct service over a specific type of network for a pre-determined period of time. A wide range of licensing approaches are available world wide. SLT currently possesses an operator licence from the TRCSL that is valid for ten years, with an expiration date of 8 February 2022.

Functions and activities of the Regulatory Division of SLT

The following are some of the activities that fall under this division:

  • Obtaining necessary licences (operator, spectrum, vendor, etc.) from the regulator.
  • Assuring regulatory compliance with all relevant bodies.
  • Administration of TRC directives.
  • Regulating tariffs.
  • Handling interconnections.
  • Negotiating with Government entities.
  • Monitoring the actions of other regulators to identify and correct any issues of malpractice.
  • Managing customer relations and complaints.
  • Ensuring quality of service.

Regulatory assets of SLT

The following are the regulatory assets that are currently in our possession:

  • Island-wide copper network.
  • Fibre network extending nearly 30,000 km.
  • 4G LTE network.
  • Spectrum radio frequencies (Maritime radio, CDMA, Wi-Fi, LTE etc.).
  • Telecommunications towers (262 island-wide).
  • Telecommunications exchanges island-wide.
  • Brand names.
  • Goodwill.

Regulatory risks faced by SLT

The spread of wireless high-speed broadband solutions such as 4G LTE is exponential. All operators do not possess advanced technology at times, and this can adversely affect market competition. The spread of technologies such as fibre needs to be regulated, as unregulated ventures by other operators negatively affect our wholesale and retail businesses. Finally, a legal framework needs to be established to protect operators from unregulated charging and taxing by local authorities and Government agencies.