Management Discussion and Analysis
Regulatory Capital

We ensure that all our operations comply with the specifications detailed by relevant regulatory bodies. The following section details some of the aspects that constitute our regulatory capital.

We witness significant and rapid changes in the telecommunications sector of Sri Lanka.

This has resulted in the introduction of computer-based telecommunications services to the industry. These developments in technology have markedly reduced the cost of traditional telecommunications services. Consumers can therefore avail of the increased affordability of services such as the Internet.

This change has furthered developments such as 4G LTE (fourth generation Long-Term Evolution) and IPTV (Internet Protocol Television). Fifth Generation (5G) technology is soon to emerge on to the market as well.

This progress and innovatory measures are regulated by telecommunications regulations such as parliamentary laws, case laws and regulatory rules. Nonetheless, there is friction here in the competing demands imposed by political interventionists and lobbyists.

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.

SLT was previously able to monopolise this sector, as the ‘Department of Telecommunications’ under the Sri Lankan Government. During this period, we experienced limited regulatory measures as we functioned directly under the Government. Nevertheless, with the rising importance of telecommunications services for both the national economy and elsewhere, this monopoly was abolished.

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 over 25,000 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 (SLT, Mobitel, PEO TV, etc.);
  • 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 (e.g. through the Thoroughfare Act or the Central Environment Act).