Airtel Lanka set for launch, local players fear tariff war

The foray of Indian telecom giant Bharti Airtel (BHARTIARTL.BO : 283.65 +2.65) into Sri Lanka has triggered apprehensions among its competitors about an impending price war. Airtel is slated to launch its operations here next week. The move will make it the biggest Indian investor here, pegged by unnamed sources at $200 million. Sources said that Airtel got the mandatory permission from the Bank of Investment (BOI) to invest $150 million in 2007. ``Eventually, their investment will go above the $200 million,'' sources said.

Airtel officials in Colombo, while confirming the launch of the services on January 12, did not comment on details like tariff structure could be. They however denied an email in circulation, which said that Airtel would offer services at less than half the current tariff structure in the market. "That email is incorrect," a senior Airtel official told HT.

It is however widely expected that Airtel would cut tariffs, if not immediately, at least gradually over the next few months. The company's launch here was is several months behind schedule because of delays in getting required permissions. Current players in the mobile market had also petitioned the government with apprehensions of tariff cuts. There are more than 6 million mobile users in Sri Lanka.