Cellular firms demand removal of USF to increase revenue
Thursday, August 07, 2008
By By our correspondent
ISLAMABAD: All cellular companies of Pakistan have proposed to the Ministry of IT and Telecom to eliminate Universal Services Fund’s (USF) share in Access Promotion Charge (APC) and let cellular companies enjoy all of APC to increase their revenues and lower the Average Revenue per User (ARPU) levels.

APC is the portion of revenue that currently equals US$0.05 per minute on all international calls terminating on landline or cellular networks of Pakistan. Fixed line operator, PTCL, gets all of APC ($0.05) for all calls that are terminated on its network. However, cellular companies are getting only 1.57 cents per minute on all calls that terminate on cellular networks. This 1.57 cents or Rs1.10 is PTA’s determined termination rate per minute for all calls that land on cellular networks. Hence, cellular companies are entertained with Rs1.10 for calls that land on its networks whether domestic or international. Remaining cost of 3.43 cents per minute (for international traffic) goes to the USF.

The proposal said that mobile companies share the largest amount of incoming international traffic that is being terminated on mobile networks, it is only fair that the portion of APC, which is being currently mopped up as USF contribution, be granted to mobile companies, so that they can further increase their revenues and support the expanding network demands through out the country.

All mobile companies believe that they are already contributing 1.5 per cent of their revenues to USF, which is much more than the amount that could be actually spent by USF Company.

The proposal sent to the Ministry of IT and Telecom and Pakistan Telecommunication Authority was signed by CEOs of all mobile companies and PTCL.