US embassy cable - 03COLOMBO751

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2003 REPORT ON INVESTMENT DISPUTES: SRI LANKA

Identifier: 03COLOMBO751
Wikileaks: View 03COLOMBO751 at Wikileaks.org
Origin: Embassy Colombo
Created: 2003-05-06 06:11:00
Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
Tags: KIDE EINV CE ECONOMICS
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS COLOMBO 000751 
 
SIPDIS 
 
SENSITIVE 
 
FOR L/CID/GLEHNER AND EB/IFD/OIA/NEFIRD 
 
E.O. 12958:  N/A 
TAGS: KIDE, EINV, CE, ECONOMICS 
SUBJECT:  2003 REPORT ON INVESTMENT DISPUTES:  SRI LANKA 
 
REF:  STATE 83098 
 
Sensitive but unclassified, please handle accordingly. 
 
(SBU) Format for this report follows requirements in reftel. 
 
a) Claimant A 
 
b) 1999 
 
c) Claimant A has a 23 percent stake in a private 
Sri Lankan telecommunications company.  In 1994 
the Government of Sri Lanka (GSL) granted this 
company a license to provide certain internet 
services.  Claimant A and its Sri Lankan partners 
began offering the service in early 1999, 
competing with Sri Lanka Telecom (SLT), the 
national telecom company (GSL's holding in SLT was 
recently reduced from 62 to 45.4 percent). 
Claimant A's service resulted in a significant 
loss of income for SLT, which began taking actions 
to block Claimant A's service.  These actions 
included bringing a local court case against 
Claimant A.  Both parties have agreed to drop this 
case. 
 
A new Telecom Regulator was appointed in 2002, and 
he has provided much support to Claimant A. 
Despite this support, including a directive to 
provide the appropriate circuits to Claimant A, 
SLT continues to obstruct Claimant A's ability to 
provide its licensed services.  The government's 
policies, reflected in the Telecom Regulator's 
decisions, recognize Claimant A's rights. 
Internet equipment held in customs since 2000 has 
been released.  Payments made by SLT to companies 
to block connections for Claimant A have ceased. 
The situation for Claimant A with regard to 
government relations has greatly improved. 
Current problems of Claimant A result primarily 
from the government's non-enforcement of its own 
directives.  Claimant A estimated revenue losses 
at $12 million and equipment losses at $900,000 
last year.  Due to ongoing problems, Claimant A 
states that 60-70% of its business is non- 
operational. 
 
Claimant A:  Lanka Internet 
 
WILLS 

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