• Airtel Lanka CEO Ashish Chandra says interconnect charges hinder making voice calls more affordable 
• Says telecom taxes amount to 12-13% of total revenue; thankful for not adding more taxes in past two years

  By Madhusha Thavapalakumar Some of us could go without water and food for hours but cannot really stay away from the internet even for a few minutes. Telecommunication services have become a ‘need’ now, no more a ‘want’. The telecommunication needs of Sri Lankans are being catered to by five operators (before the merger of Hutchison Telecommunication Lanka with Etisalat Lanka in May 2019), and Bharti Airtel Lanka (Airtel), a subsidiary of Bharti Airtel Ltd., is one of them with about 11-12% market share.  Airtel, about three weeks ago, demonstrated the 5G readiness of its network as it conducted live 5G trials over a commercial network and recorded speeds of over 1.9 Gbps, which is claimed to be the highest speed ever recorded in the country. Intrigued by the ‘highest speed recorded in the country’ claim, The Sunday Morning Business sat down for an interview with Bharti Airtel Lanka Chief Executive Officer (CEO) Ashish Chandra this week.  Chandra, who has been serving in the telecommunication industry pretty much throughout his career, the last two years of which were at Airtel Lanka, told us that Airtel has mainly focused on rolling out a high-speed data network for the past two years, as a part of which, the telecommunication operator has invested ‘heavily’ in Sri Lanka.   5G technology and Sri Lanka “We rolled out our 4G network last February 2021. The entire 4G network we created is actually 5G enabled which means this network can be easily converted into 5G with very minor alterations. This is something that we demonstrated some days back,” Chandra said. According to him, the 5G coverage is dependent on multiple factors, foremost of which is the spectrum band each telecommunication operator would receive from the Telecommunication Regulatory Commission of Sri Lanka (TRCSL). The ultimate decision of analysing which sort of coverage could be received from which tower lies with the spectrum allocation, and this allocation is yet to be made by the TRCSL.   The next factor would be connecting towers with fibre-optic cables. Chandra stated that typically for a tower to provide telecommunication services, it needs to be connected. In terms of 4G services, telecommunication operators can still proceed with radio or microwaves. However, given the fast services of 5G, it requires the towers to be connected with fibre connectivity. According to him, for the industry as a whole, procuring fibre connectivity would be a challenge.   In addition to this, Chandra suggests small towers to be put in every nook and corner of the city for users to access the 5G service. However, doing so would require access to government street furniture.   “Small towers need to be put everywhere in the city and for that, we need access to government street furniture. Street furniture could be lamp posts, bus stops, and even government buildings at different locations. We need access to them and the access has to be decided by government policies. We have been discussing this with the Government. The problem is that the 5G roadmap of Sri Lanka is still under construction. The 5G coverage of the country is dependent on the results of these discussions,” he added.   However, Airtel added that 60% of its users have already been covered with the 4G services and that the coverage keeps growing along with the addition of new sites every month.  According to Chandra, the remaining 10% of the population is the ‘most difficult’ percentage to cover as whenever telecommunication operators have to put a new site in a rural area, there would usually be much resistance from the locals. He added that getting approval from the local authorities has become another big challenge but he is optimistic about receiving Government support to address this issue.   Telecommunication sector taxes  Chandra briefed that the telecommunication operators are subjected to three different taxes in Sri Lanka that are Value Added Tax (VAT), CESS, and the Telecommunication Levy, and altogether these taxes amount to about 12-13% of Airtel’s total revenue.  “We are thankful there has not been an increase in the taxes in the past two years. We are happy about the current tax structure and I hope it will continue this way, going ahead. Telecommunication is a basic service now. We have to keep the taxes low as it will be passed onto the consumers, or else, the companies’ ability to keep investing and rolling out new services would be impacted,” he added.  However, he expressed his concern about the Turnover Tax of 2.5% that is expected to be implemented by the Government in the near future. According to him, once this particular tax comes into effect, vendors and suppliers will pass it onto telecommunication operators, which in turn will be ultimately passed onto the end user.  Further, Chandra is also pessimistic on the Special Goods and Services Tax (GST) which too would be soon implemented replacing the current VAT.  What does the industry expect from the Government?  Chandra stated that so far, a level playing field has been provided by the TRCSL in terms of spectrum allocation, and he hopes this too will continue.  Even though Airtel has been able to bring down the data charges drastically in the past few years, it has not been able to do so with the voice charges with interconnect charges under which whenever one operator hands the call to another operator, Rs. 50 cents per minute has to be paid. This affects the voice-call-dependent-users at the bottom of the pyramid.   “There is a lot of fibre infrastructure available at State institutions. For us to deliver faster coverage, we need access to the Government’s existing infrastructures. We are also looking at getting quick approvals for the sites. We need government support by providing faster resolutions to the issues of the public,” Chandra noted.  Airtel, since its entry into Sri Lanka, has mostly been a youth-focused telecommunication operator and this is, according to Chandra, because the company believes that the future of the country is the youth and they need to be empowered for the economy of the country to grow. However, he added that they have widened their target audience with the roll out of their new freedom pack.  “Freedom pack is a bundle pack. It is actually now catering to a wider segment. We have now launched a new service where the leftover data of a particular month can be accumulated and used in the next month. Typically when you have a data quota, it will expire and you cannot use it the next month. Under this, your data will never expire. This is the first time this kind of feature has been launched. While we continue to empower the youth of the country, we have widened our target market,” he added.  Talking about the pandemic and the profitability of the sector, Chandra stated that the telecommunication industry is very much connected with the economy and the masses, and during the lockdown period, when users were unable to move out and make purchases, it affected the industry revenue.  He stated that another component of this issue is as users work from home, the data usage has soared, and to keep up and cater to the demand, Airtel had to invest a lot and upgrade its capacity. However, even though the usage has grown, it does not reflect a proportionate growth in the profitability as these are either on unlimited data packages or on a very lower tariff quota.  Chandra expressed his optimism on the upcoming number portability system, stating that it will empower users, and any company that offers great value for the user should not be worried.  “Our approach has always been to offer best value to the customers. We welcome this initiative. We are really hoping to see this happening soon. We have done a lot in the last two years. We have rolled out 2,200 4G sites. We launched freedom plans last year, the most affordable freedom plan in South Asia,” he added.  Airtel is also part of the TRCSL’s ‘Gamata Sanniwedanaya’ project under which coverage sites are being set up where there is absolutely no coverage. Airtel at the moment is working on setting up six such sites.