Telecom operators ask PTA for moratorium on service quality

ISLAMABAD: The telecom operators have asked the regulator, Pakistan Telecommunication Authority (PTA), for granting a moratorium on quality of service, roll out obligations and payment of Universal Service Fund (USF) and Ignite funds reduction from 2 to 1 percent for one-year duration.

In the existing circumstances, the quality of services has witnessed massive deterioration in many parts of the country. The quality of voice service, especially, is showing poorest results because of multiple reasons, including loadshedding and financial difficulties.

The cellular mobile operators have also demanded floor price uplift mechanisms of voice and data to optimise the base price. “It is also a demand of the telecom operators to slash Advance Income Tax (AIT) from 15 to 10 percent”, top official sources confirmed to The News on Tuesday.

It is estimated one percent reduction in AIT will cost the exchequer Rs5.2 billion. Two percent reduction in tax is going to cost Rs10.4 billion.

The telecom operators have approached the government and regulator PTA for getting moratorium on quality of service. The PTA possessed mandate to evaluate the quality of service and could penalise the operators in case of non-compliance.

The official said representatives of CMOs were asking the government the Letter of Credits (LCs) were not opening well on time, and they were forced to import only highly essential equipment. So, the quality of service should be given moratorium.

The same case scenario exists for roll out obligations, as under the licence requirements, the telecom operators are bound to expand their roll out by 3 percent areas in the country. The import restrictions made it hard for the operators to procure all kinds of required equipment and were largely importing only those items considered necessary to run their operations without facing major interruptions.

Moratorium on USF and Research & Development funds reduction from 2 to 1 percent for one-year duration has also been demanded by the telecom operators. The financial difficulties, however, persisted as the Ministry of IT contacted Finance Division and asked for release of Rs57 billion funds being utilised as federal consolidated funds. The Ministry of Finance flatly refused to accommodate the demand, and even refused to release Rs6 billion funds out of the total stuck amount of Rs57 billion.

The telecom operators are facing immense financial difficulties after Average Revenue Per User dropped to $0.80 in Pakistan in the wake of steep fall in the exchange rate. CEO of Jazz Pakistan Aamir Hafeez Ibrahim had recently tweeted that Pakistan’s telecom industry can only survive if it stays above $1.5, as telecom sector cost structure is dollarised (spectrum fee, capex and fuel). “We cannot afford regulatory approach to restrict tariff increase anymore,” he said.