India’s 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 yesterday.
The Telecommunications Regulatory Commission on Thursday fixed a floor price of 2 rupees (US$0.002) per minute for outgoing mobile calls, after two years of stiff competition plunged the industry into massive losses.
The regulator said mobile phone operators reported a combined loss of Rs23 billion last year, 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, head of corporate communications Yohan Munaweera said.
Petitioning the Sri Lankan 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 Thursday’s ruling, the cost of making mobile phone calls had fallen to Rs0.25 per minute, the regulator said.
In its petition, Airtel, which began operations in January of last year, said unless a new player offered cheaper call rates “any newcomer will not be able to attract subscribers.”
Besides Airtel, the nation’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 (和記黃埔).
The telecom regulator, Anusha Palpita, was not immediately available for comment, but he said on Thursday that losses made it difficult for mobile operators to invest in new technologies to expand their network.
Technology think tank LIRNEasia said while a floor price could steady cash flows, the absence of a competition regulator forced the government to step in.
A number of Sri Lankan mobile users own multiple SIM cards, either from the same operator or from rival operator, to make use of discount call packages. Thursday’s ruling only affects new packages issued after that day.
“Since the minimum prices affect new customers, we think it will create a gray market for SIMs,” said Helani Galpaya, chief operating officer of LIRNEasia.