SC orders tariff reduction but SLT bills may go up

Sri Lanka Telecom subscribers will be paying more instead of less as expected in terms of a Supreme Court order to reduce tariff.

For the first time the SLT has introduced a complicated and varied call charge system with a newly introduced start up charge of Rs. 1.50, and the subscriber is likely to lose heavily when calling during “Economy” and “Discount” times.

For instance, a three minute local call made during ‘Economy’ time which now costs Rs. 3 will cost Rs. 5.70 under the new system. Similarly, a two-minute call made to any other fixed line or mobile operator during ‘Economy’ time -- which now cost Rs. 3 -- will cost Rs. 6.10 in future. There is no change in the loss to the subscriber during the ‘Discount’ time too.

Telecom Regulatory Commission (TRC) Chairman Kanchana Ratwatte is denying that the charges would go up. But, experts who have studied the new tariff system say that bill will be increasing.

Overall the bill of the low end and the middle level user class will not drop. Under the current tariff system, the peak hours will be applicable from 8 a.m. to 6 p.m. on Mondays to Friday and 7 a.m. to 2 p.m. on Saturdays. In the new tariff system, the peak traffic duration has been extended from 10 to 11 hours as the new hours will be starting from 7.00 a.m.

The new tariff structure in accordance with time based billing instead of unit based structure follows a Supreme Court ruling to reduce tariffs from next month.

The court order came sequel to an action by the Consumer Association of Sri Lanka challenging the arbitrary increases in rates.
SLT announced that bills would be reduced by 8.7 percent and the over charged amount would be deducted from the telephone bill in compliance with the court order to refund the excessive tariffs amounting to billions of rupees. However experts point out that bills could rise by as much as 63 per cent.

SLT agreed to move to time based billing instead of unit based structure by which customers will not have to pay for unused time during their conversation. SLT also said there would be a reduced rental both individually and on business lines and a billing discount which could amount to about Rs.400 worth of call charges per month.

SLT sources told The Sunday Times that the monthly rental had been reduced to Rs. 345 from Rs. 495, a drop of Rs 150 while the monthly rental for a business line would be reduced from Rs.1, 250 to Rs.950. However SLT subscribers say earlier they were given 200 free units at the rate of Rs 3 per unit amounting to Rs. 600. But now the company is proposing to offer a cash discount of Rs. 400 only.

However a senior SLT official contended that the time based and unit based tariff structures could not be compared as there were differences in calculation methodologies and almost all telephone providers in the island were following the time based tariff system. With the introduction of the new tariff structure, the SLT will move to time based (per second billing) on SLT calls which will be a simple structure compared to the present unit based structure.

SLT is also confident that its revenue will grow despite the tariff reduction, he said adding that domestic call revenue fell 3% in the first half of 2007 to Rs 9.8 billion while mobile revenues through its subsidiary Mobitel surged 24% to Rs 3 billion.