Short Leash

Feb. 28 (LBO) – Swedish owned telecom operator Suntel, plans to tap local banks this year to raise US$80 million, despite a government directive to slap import duties on handsets with immediate effect, a top official said Tuesday. The private wireless local loop operator (WLL) has seen its subscriber growth soar to 188,000 customers after securing a license to offer cheaper connectivity through low cost CDMA (code division multiple access) technology.

While the network expansion is shrinking Suntel's cost per line to around US$ 200 from a high of US$ 1000, the champagne corks are yet to pop.

"The import duties on CDMA handsets are not fair. Mobile handsets using the same technology comes in duty free. We need a level playing field," Suntel's Chief Executive Jerry Huxtable told reporters.

Being a Board of Investment (BOI) company Suntel, used to import customer premises equipment or handsets without paying import duties.

However, the BOI last week wrote to Suntel and Lanka Bell (the other WLL operator) asking the firms to pay up with retrospective effect.

Huxtable says the import duty on CDMA stands at around 18 percent, but the overall tax on each unit now goes up to 33 percent with immediate effect.