Samarajiva calls for spectrum auctions with credible roadmap

 

Founding Chair of LIRNEasia-Sri Lanka, Professor Rohan Samarajiva says taxing incoming and outgoing calls in this day and age is silly.

“Sri Lanka has desisted from imposing universal service levies and it doesn’t make sense to tax a service that is being encouraged.”

He expressed these sentiments speaking at the second Broadband Forum held in Colombo this week.

Expressing satisfaction over the recent reduction of telecommunications levy on data as a good start, Prof. Samarajiva urged the need to develop a new statutory framework for the development of the telecommunication sector and restore the legitimacy of the regulator.

“Sri Lanka needs a new ICT legislation to create modern regulatory environment as it is currently working under a 26-year-old law. The Act governing the sector came into effect from 1991 and was amended in 1996.”

According to Prof. Samarajiva, spectrum re-farming is central and it is the most critical input in providing wireless broadband access.

“All users of spectrum must understand that assignments are not forever; countries that are technogoly takers must realign their spectrum assignments periodically. In addition, digital transition for 700 MHz band must be the highest priority.”

Commenting on spectrum auctions, he noted that auctions are the best way to allocate scarce resources.

“Auctions are best, but unless auctions are embedded within a credible roadmap, they will distort bidders’ incentives.”

“Investment comes where there is certainty and predictability and we also need to understand that creating platforms for applications will require investment.”

To this end, it is necessary to utilise general tax revenues or matching funds rather than depending on pure subsidies.

Further, uncertainty in the tax environment and regulatory risks, especially for re-market entry and exit, scope of licenses and spectrum must be reduced, Samarajiva noted.