SLT introduced a new tariff in November 2007 after a protracted legal battle with the Consumer Association of Lanka. The matter is now before the Supreme Court as a consequence of a further petition filed by Mr Vasudeva Nanayakkara, Ret Major General Kamal Fernando and this writer alleging that the benefits stipulated by the court were not passed on to subscribers. This article will not touch upon any of these sub judice matters. It’s subject is something quite different, a new package of tariffs called the V-Talk that SLT introduced about a month ago. All new phone subscribers it seems will have to choose an option from within this pack and it is not yet clear whether existing subscribers will, eventually, be compelled to convert to it.

The V-Talk pack offers four options; Value, Active, Novel and Forever. I will deal with what is likely to be the most popular general purpose option, Value, and the oddly configured Forever pack. For reasons of space the other two will not be touched on. The packages are described on SLT’s poorly designed website which represents numbers as a donkey would – one gets tabulations with 4.5, 6, 2.5 etc thrown around, and it takes a phone call to clarify that these stand for call charges in cents per second of calling time.

There are some complicating factors in comparing the pre-November 2007 (pre-N) and post-November 2007 (post-N) tariffs with the new V-Talk packs. The post-N tariffs will sometimes be referred to as Existing. The Existing plan has several spatial zone divisions (SLT-SLT-Local, SLT-SLT-Trunk, SLT-Other-Local, SLT-Other-Trunk & Mobile, and Internet access; five in all). The new V-Talk plan, thankfully, simplifies it down to just two, Local, and Trunk & Mobile. Indeed based on technical rationality there should never have been any distinction between one’s own and other operator’s fixed-line networks. The change therefore is welcome for consumer clarity and to end the anticompetitive practices now in vogue among operators. So now, (a) you call an SLT or any other fixed-line service provider within your Local area; or (b) you make a Trunk call to SLT or network of any other service provider or a Mobile number. That is, in V-Talk, mercifully, there are only two spatial categories. There are three time domains, Peak, Economy and Discount but the post-N scheme took away one week-day hour from pre-N’s Economy and inserted it in Peak, thus disadvantaging subscribers. V-Talk’s Value-Pack retains the three time bands but sticks with this reduction of the Economy band by an hour. Despite these complications there are broad brush ways of comparing the older schemes with V-Talk and showing that the latter is a rip-off.

The pre-N scheme included Rs600 worth of monthly free calls but the Existing (post- N) scheme pruned the free call allowance down to Rs400. SLT tried to sweeten it with a rental reduction from pre-N’s Rs485 a month to Rs345 in post-N. These gymnastics may have confused some subscribers but basically it was a loss of Rs50 for any subscriber who made Rs600 or more worth of calls a month. These rentals refer to residential subscribers; dealing with business users would require a longer article, or better a consultancy fee for my professional services! Another point that I cannot deal with fully here is that in 10 of the 15 possible combinations of spatial and time categories, the post-N tariffs are higher than the pre-N tariffs. That is, your calling charges post-N will be higher than pre-N in addition to your upfront Rs.50 loss. Now I will show that VP-VT has jacked up consumer charges even further.

The clever device that VT-VP offers is a further reduction of the monthly rental to Rs245 from the Existing Rs345 but, hey presto, it completely removes the Rs400 free call allowance! Hence VT-VP gives you Rs100 with one hand and takes away Rs400 with the other. The simple fact is that, as an example, a subscriber whose monthly Calling Charges exceed Rs600 would lose Rs300 a month in comparison with the Existing tariff were he to opt for VP-VT. We may refer to this as the Up-Front loss. (He would lose Rs400 a month Up-Front in comparison with the pre-N tariff)

Now SLT argues that it has reduced the per-second tariffs, hence subscribers can recoup the Up-Front loss in the Call Charge section of their bills. Let us examine this. Since the Value Pack recognises only two zones (Local and Trunk & Mobile) we need to choose the two categories of the Existing tariff that best matches these definitions. These are the SLT-SLT Local category and the SLT-Other-Trunk & Mobile category of the Existing scheme. Ok so what are the per-second tariffs in the existing scheme and the V-Talk Value Pack (VT-VP) for these two categories of calls? The first table compares Local call tariffs and the second compares Trunk & Mobile tariffs; all numbers are in cents per second.

Existing VT-VP

Peak 4.67* (5.33) 4.5

Economy 2.33* (2.67) 2.5

Discount 0.83 1.0

[*These are SLT-SLT Local tariffs. Tariffs for SLT to Other-fixed-line Local calls, which are much less frequent, are shown in brackets. There is also a thoroughly iniquitous Rs1.50 start-up levy imposed as soon as a connection is made in both the Existing and VT-VP plans]

Existing VT-VP

Peak 7.67* (6.67) 6

Economy 3.83* (3.33) 3

Discount 0.83 1.0

[*These are the tariffs for SLT to Other-fixed-line Trunk-calls and all Mobile calls. Tariffs for SLT-SLT Trunk-calls (much more frequent than SLT to Other-fixed-line Trunk-calls) are shown in brackets. The iniquitous Rs1.50 start-up levy applies in both cases].

For Local calls the picture is mixed and callers with a mixed local calling pattern are unlikely to see a change in the Local Calling Charge part of their bill. In the Trunk & Mobile part of the bill they will see some reduction in Calling Charges if they are frequent day time trunk call makers, or call Mobile phones frequently. Now recall that because of the elimination of the free calls and changes in rental, subscribers lose Rs300 a month Up-Front (Rs400 if you compare with the pre-N). So assuming there is no net benefit in Local calls but only in the Trunk & Mobile category I made a pencil and paper estimate that only a subscriber whose monthly Calling Charge exceeds about Rs1,500 in the Trunk & Mobile category will benefit overall from switching to VT-VP. This rises to about Rs2,000 if the comparison is with the pre-N tariff. All other subscribers will lose money under the VT-VP and should refrain from choosing it. However, I am not sure whether new subscribers will be permitted a ‘No to V-Talk’ choice.

For the sake of the technical buff I need to mention that this reasoning is approximate. Firstly since the tariffs for different mixes of calling patterns are different, the actual difference in Calling Charges of a subscriber will depend on call pattern –Local, Trunk & Mobile, Peak, Economy and Discount. Secondly, since I have not analysed in detail the effect of contracting the five Existing spatial zones to just two in VT-VP, there will again be variation from subscriber to subscriber. Nevertheless it can be said with confidence that this analysis gives a reliable broad-brush layman’s picture.

I strongly recommend that nobody touches the V-Talk Forever-Pack (VT-FP). VT-FP allows you to talk to any called party (Local, Trunk, SLT, Other or Mobile) at Rs9 for each 15 minutes of call time, at any time of day. The rental is high, Rs495 a month. It may seem attractive to parents with teenage daughters who are in the habit of hanging on the phone endlessly, but it is deadly.

The first problem is that whether you speak for one minute or for 14.9 minutes you end up paying nine bucks. Think of all the "she is not at home", "he is at a meeting", 30 second disappointments, think of all the "press 1 for sorrow, 2 for joy" one minute annoyances, think of brief business or family calls to clarify something. Well, you will pay nine bucks for each and every one of them. Remember, unless you have two phones at home or on your office desk, every call, short or long, is billed at this Never, Never rate. If you average five brief or disappointment calls a day your phone bill, including the rental, will be Rs1,845 a month even before your teenage daughter gets near the instrument.

The second problem is that nobody, least of all wives and teenage daughters, make phone calls with a stopwatch in their hands. So if a call crosses the threshold to become 15.1 minutes you pay Rs18, and so on – sorry old chap but that’s how it goes. Under VT-VP or the Active pack a 15.1 minute call made to any Local, Trunk or Mobile number, between 9pm and 5am will cost Rs10.56 including the Rs1.50 start-up levy. VT-FP is the only one of the four packs that does not levy the start-up fee. Under the Existing tariff scheme this Discount period call will only cost Rs5.03 including the start-up levy.

All over the world communications tariffs are declining steeply; not in Sri Lanka. The main reason is subscribers are not aware of what is happening. SLT is the sector’s market leader and a price hike by SLT will clear the way for others to follow suit. I hope this short article generates some discussion.