SL Govt. should focus on telecom investment, not subsidies
The Sri Lankan government should be focusing more on investment and not subsidies to develop telecommunications in the country, s ays Rohan Samarajiva Chairman of LIRNEasia.
Addressing the second Broadband Forum held at the Galle Face Hotel in Colombo recently Mr. Samarajiva said that the Government said, “The Sri Lankan government should focused more on investment and not subsidies. Taxing incoming and outgoing calls in this day and age is silly. Sri Lanka has desisted from imposing universal service levies and now is not the time to start. Spend down the accumulated funds and rely on public- private part- nerships for continuation.” If subsidies are required one should use general tax revenues and go for matching funds but not pure subsidies. Investment has to be the priority, he added.
He also stated that the Internet eco-system revolves around the infra- structure, attractive content or applications, skilled users and affordable user friendly devices.
Investment comes when there is certainty and predictability, he stated while elaborating that major investments are required to build overlay networks. Also creating platforms for applications will require investment. For major investments with relatively long gestation periods, uncertainty in tax environment must be reduced and regulatory risk must be reduced, especially re- market entry- exit, scope of licenses and spectrum.
Describing a road map to reduce regulatory risk, Mr. Samarajiva stressed that the best way to improve spectrum regulation is to set out principles and a schedule for reforming actions. “Make principles explicit and include time ( when specific blocks will be reformed or made available). To the possible extent, reduce technology bias in spectrum assignments. Change the certainty, all should recognise that nothing is permanent in spectrum assignments, but the change should be predictable and the path decided through extensive consultation based on principles,” he explained.
Whether the government needs revenue now or over time, Mr. Samarajiva noted, they should take as much as possible upfront or create conditions for continuing revenue streams. Auctions are the best way to allocate scarce resources where they can be designed to encourage rapid rollout or optimize revenue. Sri Lanka has held a few auctions but fees have been relatively l o w. Th e Te l e c o m m u n i c a t i o n s Regulatory Commission is the biggest contributor to Treasury with US$ 98.2 million expected this year in addition to $ 5.2 million from Sri Lanka Telecom as dividends, he noted.
Sri Lanka needs new ICT legislation to create a modern regulatory environment. “We are working under a 26-year old law. The Act governing the sector is from 1991 that was amended in 1996. Abuses of fund which saw criminal misappropriation of $ 4 million is just one symptom. Develop a new statutory framework and restore legitimacy of regulator,” he noted.
Sri Lanka needs new ICT legislation to create a modern regulatory environment. “We are working under a 26-year old law. The Act governing the sector is from 1991 that was amended in 1996. Abuses of fund which saw criminal misappropriation of $4 million is just one symptom.