Although mobile subscribers outnumber fixed-line subscribers by almost three-to-one, "the decision was aimed at protecting a minority of pensioners and pay phone users who are against the structure," TRC representative P.R. Amarasiri said.

"We have to balance the scales even though we support growth in the mobile phone sector," she said.

CPP would have allowed mobile operators to let their subscribers receive calls free of charge. Currently, both caller and receiver bear the costs of calls. If CPP was implemented, the cost burden would have shifted to those using fixed-lines.

The proposed system has been in development since 2000. However, a lack of consensus on a cost structure had delayed its implementation. Amarasiri said the TRC will now conduct a cost study on all telecom operators and draw up an alternative tariff scheme.

The island's two main mobile phone operators – Dialog Telekom and Celltel Lanka – have recently made heavy investments to expand and upgrade their services in preparation for the CPP system. Dialog is the country's biggest mobile phone operator in terms of subscriber base. The other mobile operators are: Celltel Lanka, Hutchison and Mobitel.

According to central bank statistics, in terms of subscribers the country's telecommunication sector expanded by 36% in 2004. Mobile operators dominated the market with a share of 67%.

Source: Dow Jones - WDR/Intelecon Regulatory News