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174 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA It also commits to open markets for data transmission, e-mail, internet and intranet, domestic VSAT, trunked radio services, videoconferencing, telemedicine and teleeducation. Additional commitments taken are as follows: Pakistan endorses the reference paper with minor alteration that cost oriented interconnection rates shall be implemented by year 2008. Further, privatisation of PTCL is on the anvil. The management of the Company shall be transferred to a selected strategic operator. Unlike for India, Pakistan’s offer is closer to its applicable regime, although similar to other SAFTA nations, Pakistan has not offered to bind its applicable regime. The rationale for this is similar to that discussed for India and Bangladesh above. Sri Lanka Fuelled by progressive market reforms, economic liberalisation, and pent up consumer demand, cellular services in the country grew by 61%. Total number of cellular subscriber stood at 1,884,076. Fixed line also grew at a faster rate of 52%, which is higher compared to other nations. Total number of fixed line subscribers stood at 5,412,496. Teledensity in the Island nation touched 36.7, where mobile density was 27.1. The Internet growth however lagged behind and registered a growth of mere 13%. However, with the launch of 3G services, it is expected that the growth rate will improve. Sri Lanka has four licensed telecom service providers each in mobile and fixed line, and twentyfour ISPs. Sri Lanka Telecom is the largest service provider in the country. NTT holds 35% stake in the company, 49.2% is owned by the Government of Sri Lanka, and 15.3% is listed on the Colombo Stock Exchange. SLT currently has a customer base of more than 2 mn, and has 85% market share in fixed line business. SLT is the only integrated operator in this country to offer fixed line, data, and mobile services. Lanka Bell is the second fixed phone provider which uses CDMA technology to service its customers, with a customer base of more than 500,000 active subscribers; the Lanka Bell user base serves well over 10% of the country’s population. Suntel is another CDMA player with 300,000 customer base. Tigo formerly called CellTel registered a growth of 42% in revenues, and had 2.3 mn customers at the end of year 2006. SLT subsidiary, Mobitel’s subscriber base was 0.8 mn by December 2006, an increase of 111% y-o-y basis. It plans to introduce 3G services soon. Hutch Sri Lanka is wholly owned subsidiary of HTIL which has a subscriber base of more than 0.7 mn. MTN Dialog Telekom is the largest GSM service provider. In addition to its core mobile telephony business, the company provides international services, supporting an international gateway infrastructure providing retail and wholesale international voice and data services under the brand name of Dialog Global. The company also provides internet services through Dialog Internet – a full-fledged ISP. Dialog Telekom also operates Dialog SAT, a mobile satellite service, which is a fully owned subsidiary of Telecom Malaysia. It added over one million net subscribers within a period of one year. The company’s cellular subscriber base increased by 46% to reach 3.37 mn subscribers by 31 March 2007. The company has also implemented a WiMax Network in Colombo. It has the distinction of being the first 3G operator in South Asia to commence commercial operations. Bharti Airtel has bagged the license as fifth Mobile operator and plans to invest $150 mn. The company has got the approval to offer both 2G and 3G services. Table 15.6 Key Indicators for Sri Lanka Population* 20 Fixed lines* 2.08 Fixed teledensity 10.4% Mobile phones* 6 Mobile density 30% * million. Sources: http://www.trc.gov.lk/ Comparison of the applicable regime described above and the commitments made by Sri Lanka (1997) reflect the limited nature of the commitments made. (See Appendix, Table 15.6). Sri Lanka undertook the following commitments in 1997: • For voice telephony: – There will be of one operator for International Long Distance until 1999 with an FDI limit of 35%. – Offers duopoly in international basic voice services from 2000, subject to satisfactory progress by the monopoly on tariff rebalancing. – Foreign equity participation of up to 35% permitted for a strategic partner in the government owned operator SLT. – For local and domestic long distance four operators licensed; commitment to review the number of licences permitted in 2000. – Commits to two licenses (in addition to SLT)
P ROSPECTS FOR THE TELECOMMUNICATION SECTOR UNDER SAFTA 175 for supply by wireless local loop of basic voice telephony, data transmission, payphones, voice mail and facsimile; the two licensees are guaranteed exclusivity for five years. – Commits to five licenses for public payphones services and for paging services licenses with possible additional suppliers of each to permitted subject to economic needs tests. – For all suppliers other than SLT, foreign equity permitted up to 40% with investments over 40% subject to case-by-case approval. • For circuit switched data transmission services • For facsimile services • For private leased circuit services: Commits to six operators of data communication services. For GMPCS services supplied through own gateways, indicates that issuance of licenses is under consideration. • For cellular mobile telephony: – Commits to four operators of cellular mobile services – For all suppliers other than SLT, foreign equity permitted up to 40% with investments over 40% subject to case-by-case approval. • Has filed for MFN exemptions with regard to accounting rates to permit the Government or the Government-run operator to apply differential measures, such as accounting rates, in bilateral agreements with other operators or countries. • Additional commitments taken are as follows: – Sri Lanka has committed to the reference paper on regulatory principles. Sri Lanka has not submitted an offer to the WTO or at least it is not available in the public domain. The gap between the applicable regime and commitments for Sri Lanka are wide and there has been considerable criticism of this disparity. For example, it has been stated that it is unlikely that the level of commitments made by the government of Sri Lanka (GoSL) would be accepted by the parties to the GATS today. 10 But they were accepted, and there is no specific overt pressure on GoSL to improve its commitments at this time. Such pressure may arise either when the Doha Process gets restarted or within the context of bilateral or plurilateral trade negotiations, especially with countries that have significantly liberalised their telecom sectors and are home to regional investors. One reason GoSL would consider making concessions in telecom services is to gain concessions in a different sector such apparel exports. This was the primary objective of GoSL in the tentative negotiations with the USA on an FTA in 2003. 11 Nepal Despite a very politically volatile situation in Nepal, the telecom sector saw a good growth rate. On the fixed service front the quarter ending July ’07 more than 57,00 new lines were added, most lines being catered by CDMA network, viz., fixed wireless and limited mobility. The overall growth rate in six months was 20.31%. The fixed line penetration is still low at 2.73%. The gap between fixed line penetration and mobile penetration is still getting wider with mobile penetration jumping to 5.67%. There are two fixed line service providers NDCL and UTL and their market share is 88% and 12%, respectively. NDCL is providing service in all the districts of Nepal through wire-line as well as wireless service. Both operators have obtained license to operate limited mobility service in addition to their fixed service license. Mobile services saw growth of over 50% in last six months in terms of net subscriber addition. Nepal Telecom has introduced 3G mobile services since 17 May 2007. Rural service was expanded in Nepal under the fifth phase telecom project, through Japanese (JICA) and IDA (World Bank) fund. Country’s seventy-five district centres have automatic telecommunications service, including STD and ISD. On the Internet services front, even with more than thirty ISPs currently operating, this sector has not shown any noticeable performance. Growth of Internet subscribers in the quarterending July was just 62,586 and the growth in six months ending July 2007 was at 25%. Out of the fortytwo licensed ISPs, thirty-two are currently operating. The subscriber base of incumbent NDCL has reached 8,68,046 whereas that of Spice Nepal is 7,02,975 hence a total of 15,71,021 subscribers. The number of postpaid subscribers has gone down by 1644. NDCL distributed 2,629 new lines in the last quarter whereas SNPL distributed 2,12,260 lines in the same period. SNPL now holds 44.75% of the market share, 8.75% more than the previous quarter whereas that of NDCL continued to decrease in this quarter as well, going down to 55.25%. The mobile customer base 10 See Samarajiva, Rohan (2007) Sri Lanka’s telecommunications commitments under GATS: Assessment and issues for the future, LIRNEasia, www.lirneasia.net 11 Ibid.
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QUANTIFICATION OF BENEFITS FROM ECO
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QUANTIFICATION OF BENEFITS FROM ECO
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Preface Our consultations with seni
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viii CONTENTS 7. Revenue and Welfar
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Executive Summary OBJECTIVE This st
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EXECUTIVE SUMMARY xiii Table 1 EAMA
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EXECUTIVE SUMMARY xv India A full S
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EXECUTIVE SUMMARY xvii indicates th
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EXECUTIVE SUMMARY xix ments on basi
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Part I BENEFITS FROM TRADE, INVESTM
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4 QUANTIFICATION OF BENEFITS FROM E
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2 Literature Review and Rationale f
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4 Effective Additional Market Acces
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6 Impact of SAFTA on Member Countri
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7 Revenue and Welfare Implications
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8 Impact of SAFTA on Inward and Out
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9 Quantification of Benefits from T
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Part II BENEFITS FROM DEEPENING INT
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11 Construction and Related Enginee
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12 Tourism and Travel Related Servi
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Appendix 14 Table A14.1 Telecommuni
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Appendix 15 REFERENCE PAPER Scope T
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Bibliography Abelson, P. (1996),
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BIBLIOGRAPHY 241 Cuba (2002), Negot
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BIBLIOGRAPHY 243 (2004), Impacts of
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BIBLIOGRAPHY 245 Silva, Patricia an
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BIBLIOGRAPHY 247 (1998), Tourism Se
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