Monday, October 3, 2022

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Telco customers cry foul over TRCSL tariff hike

The TRCSL-approved price increase for all mobile, fixed, pay-TV will come into effect from today, a move operators said was long due whilst customers termed it as ‘unfair’ amidst the ongoing economic crisis.

The telecommunications providers jointly announced that the regulator the Telecommunication Regulatory Commission of Sri Lanka (TRCSL) has approved an upward tariff revision for all Mobile, Fixed, and Pay-TV service providers.

Thereby, mobile, fixed, broadband, and other services tariffs have been increased by 20%, while all Pay-TV tariffs have been increased by 25%. In addition, there will be an overall 15% VAT added to the bill, it added.

“There was no public consultation before the price hike hence it is very unfair, several customers said, claiming that telco service providers are earning massive turnovers,
TRCSL as the regulator should consider the economic situation and the present plight of consumers before giving approval for tariff hike.

Fitch Ratings expect the mean 2022 FFO net leverage for SLT and mobile leader Dialog Axiata PLC (AAA(lka)/Stable) to remain stable at about 0.9x (2021F: 1.0x).

Dialog and SLT should consolidate revenue market share further at the expense of smaller telcos, while focusing on profitable growth.

Industry revenue should rise by 8%-9% in 2022 (2021F: 12%-13%), amid strong growth in data, fixed broadband and digital TV.

Average 2022 capex/revenue should increase to about 26% (2021F: 24%) as the telcos expand 4G coverage and fibre connectivity.

The rationale for the tariff increases across the board is due to the escalation of operational costs resulting from the devaluation of the rupee, and the recent 15% VAT hike announced by the Government during its interim Budget.

The industry had been requesting for a hike since 2020 but TRC had deferred it.Sri Lanka’s mobile penetration has seen a phenomenal increase during the past 20 years. Mobile telephone subscriptions which stood at 430,202 in the year 2000 rose to 28.73 million in 2020.

Following the COVID-19 pandemic, the country has seen an exponential increase with the number now standing at over 29.95 million.

In 2021, total fixed access services (wirelines and wireless local loop telephones) was at 2.85 million and the internet connections (including mobile internet connections) was at 22.23 million.

Despite the claims of operators on rising operational costs, the customers complained that during the power cuts there is hardly any connection for data subscriptions.

“The fault of economic mismanagement by those responsible is now being forced upon the telco customers.

As citizens of the country, we have to bear all the absurd and unfair burden of rupee devaluation and ad-hoc tax policies implied by the authorities,” they alleged.

The distressed customers also said additional data connections they bought because the WiFi connections were out of service during the power cuts, but even those data connections do not work during scheduled power outages as towers in areas lose connectivity too.

“We have made several complaints to the operators. To these, the only response we have gotten so far is that they do not have the infrastructure or the technology to provide services during the power cuts.

However, by the end of the month, we have to pay for the monthly subscription payment, irrespective of the usage of the connections,” they charged.

The customers also pointed out that if the TRCSL was in agreement with the operators for the tariff hike, without even addressing the issues of slow data speed, lack of capacity, infrastructure, and technology issues only thinking about the benefits to the telco companies, whilst completely disregarding the customers.

“As a regulator, the TRCSL should look into the aspects of both the service provider and the customer. In this case, we see that the TRCSL has taken a biased decision from the operator’s perspective.

During fuel shortages and COVID pandemic, online school activities and work from home (WFH) was the only option.

“With this tariff hike we do not have the financial capacity to manage the household expenses, as the salaries have not increased as against the soaring cost of living, ” they said.

As customers of both urban and rural communities, we could have been at least satisfied if there was seamless connectivity to all customers than resorting to bias and ad-hoc tariff hikes,” they claimed.

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