Telecom secretary wearing two hats is not healthy-Suntel boss

By Paneetha Ameresekere
The independence of the telecommunications regulator is questionable, and having Saman Ediriweera as both the telecommunications ministry secretary, as well as the chairman of the telecommunication regulatory commission (TRC)-the telecom regulatory body in the country, is not healthy,’ said Suntel Ltd Managing Director Hugo Cederschiold yesterday.

He said that when Suntel ‘came’ to Sri Lanka in 1996, the environment that was projected to them by the government was that the country was on track to liberalise its telecommunication sector, encourage competition, and have in place an independent telecom regulator.

‘The climate projected by the government in 1996 when Suntel made its investment and what actually is taking place today, is quite different,’ Cederschiold said, adding that the first director general of the TRC professor Rohan Samarajiwa was not afraid to take independent decisions.

He also expressed his doubts that the second international telecommunications gateway as promised by the government would be on stream by next year.Currently, the country has only one such gateway which is a monopoly of Sri Lanka Telecom (SLT).

The Suntel boss also said that it was the original intention of the government to have in place this gateway in 1999. But after NTT’s strategic investment in the government run SLT in 1997, this was pushed back to 2002, he said.

Explaining the reasons for his doubts that this gateway would be on stream by next year, Cederschiold said that the establishment of such a gateway is a time consuming affair which may take as much as a year.

‘It requires investment in infrastructure and negotiations with international telecom operators on various issues. For instance, in the USA alone there are several operators running international gateways, and it is the same story in Europe as well. So, sorting out and negotiating all these issues with different international operators take time,’ he said.

Cederschiold further said that the government has neither called for licences nor tenders for the establishment of this gateway which is targeted to be on stream in 2002. Such acts of omissions and commissions by the government does not help to build investor confidence, he said.

Cederschiold said that one of the commercial advantages that an operator running such a gateway would have is that his earnings would be in dollars as that was the currency that is being used to make international settlements.

‘For instance, all of Suntel’s revenue is in rupees,’ Cederschiold said. And in a scenario where the rupee tends to depreciate and when almost all our loans are in dollars, such an enviroment does not help us,’ he said. Cederschiold also said that their company would be interested in operating such a gateway.

But, when it was pointed out that there is no guarantee that Suntel would in fact be given the contract to operate such a gateway if in the event it came on stream, he said that in any case competition created by having in operation two such gateways (as against having a monopoly), would generally result in prices coming down.

He also said that there should be a level playing field in the telecommunications sector. ‘For instance, the country’s two fixed wireless local loop operators, Suntel and Lanka Bell are not permitted to give their customers underground cable connections, which privilege is enjoyed by only SLT, he said.

Admitting that Suntel was agreeable to this clause when they began their investments here, he however felt that in hindsight that such a clause acted more as an impediment rather than an encouragement for the players to operate on a level playing field.

Suntel is an over $ 100 million investment in the fixed wireless local loop industry in the country and its stakeholders are Telia Overseas AB of Sweden (51%), Metropolitan Group (19%), TVG Hong Kong (17%), IFC Washington (8%) and NDB (5%).