Mobile industry wants Rs. 200,000 per month tower levy called off

• Rings Govt. to warn of consequences including poorer connectivity in rural areas 
• Says towers already shared by mobile operators, tech conforms to WHO and other standards  
• New levy could prompt operators to close towers in unprofitable areas Levy would discourage internet coverage expansion   

The mobile telecommunications industry yesterday cried foul over the Budget 2018 proposal to charge Rs. 200,000 per month on cellular towers, insisting that it would increase the unprofitability of towers and lead to reduced internet coverage while dismissing the State’s contention that it would encourage sharing between operators.

In a statement, the industry pointed out that if the Government persisted with the measure, towers in rural areas could be reduced, eventually slowing down the internet penetration in the country, which is currently at about 38%.

“For more than two decades Sri Lanka’s mobile industry had been a key contributor to the economy of Sri Lanka, delivering 100% population penetration of mobile services at some of the lowest tariffs in the world,” the statement said. It added that three out of the five mobile operators were “still loss-making” and the tower levy would also impact the profits of the other companies, which could lead them to reduce investment in other areas.

As stated by the Treasury, nearly 6,750 towers are used by the five mobile operators to support the needs of a population of 20 million. However, each tower can only support the equipment of 2-3 operators due to tower loading constraints, the statement said.

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The statement argued that all mobile operators under the direction of the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) were already obliged to share towers before any approval is given for a new tower in a designated area. “As such, very few new towers have been built over the last few years,” it contended.

“The latest mobile internet technologies offering 3G and 4G services operate on higher frequencies such as 1,800/2,100MHz. Such technologies will necessitate even more towers to cover the population compared to GSM voice on 900MHz. At present, each of the five mobile operators offers services on 900, 1800 and 2100MHz frequencies. Thus, a radio transmitter for each of these frequencies by each operator has to be installed on these towers. This would have implications on a tower’s loading capabilities, thereby constraining the ability to share a tower.”

“A tower is extremely costly to build and operate. It costs more than Rs. 10 million to build a tower and Rs. 115,000 a month to maintain the tower (including electricity, security and site rent). As such, operators would naturally be extremely conscious of building unnecessary towers. The proposed Rs. 200,000 tower levy will increase the monthly operational cost from Rs. 115,000 to Rs. 315,000, an increase of 174%.”

“All operators already have a large number of loss-making towers in rural areas. These losses will be significantly augmented if the proposed levy were to be implemented, making them economically unviable to sustain. As a result, mobile operators will be compelled to decommission a large number of unprofitable towers and reluctantly deprive customers of service particularly in rural underdeveloped areas,” it added.

With regard to the environmental and health hazard concerns raised, the mobile industry said it complies with all local and international environmental and health standards such as World Health Organization (WHO), Central Environment Authority (CEA) and GSMA standards. In addition, telecom operators have installed advanced lightning protection systems in all their towers to protect expensive onsite telecom equipment and the locality against lightening damage.