PTA takes CMOs to task for threatening to shutdown telecom services

KARACHI: Pakistan Telecommunication Authority (PTA) has taken cellular mobile operators (CMOs) to task for threatening to shut down telecom services and invoking ‘force majeure’ due to fiscal constraints, load shedding and 100 percent cash margin condition.

PTA in its letter jointly issued to Telenor, Jazz and Ufone dated June 24, 2022 asked the CMOs to “exactly highlight the difficulties for meeting the rollout obligations targets, as financial reasons are not justified, whereby telecom operators considered it a force majeure, outside the control of the telecom industry”.

The regulator was cognizant of the economic challenges faced by the CMOs. “As far as, the impact of prevailing inflationary trends, the CMOs have proposed increase in tariffs which are favourably considered by the authority on case to case basis as applicable,” it said.

It pointed out that recently signed license condition state that “any relaxation in the roll out targets may be granted by the authority only in case of genuine difficulties to be supported and substantiated with reasons by the licensee”.

CMOs sent a letter addressing Muhammad Shuaib, Director General (Enforcement), PTA on June 14 pointing out various reasons for poor service delivery, and requested to take a “favourable decision” so the industry could “keep providing essential telecoms services to the masses”.

The CMOs letter read that in the absence of immediate reversal of adverse directive(s) and elimination of electricity load shedding, the telecom operators would unfortunately be constrained to notify force majeure situation under special circumstances, outside the control of the major telecom service providers of Pakistan.

“We would also like to request kind indulgence of the authority with the relevant quarters for favourable decision in order to enable the telecom industry to keep providing essential telecoms services to the masses,” the joint letter said.

The letter sent to PTA by the CMOs was jointly signed by PTCL and Ufone Group Chief Regulatory Officer Naveed Khalid Butt, Jazz Chief Corporate Affairs Officer (CCAO) Syed Fakhar Ahmed, and Telenor CCAO Kamal Ahmad.

In response, the regulator said the CMOs were not meeting their rollout obligations and invoking force majeure clause citing “unjustified” financial constraints to excuse poor quality of service.

PTA raised questions about the highlighted financial constraints, and pointed out that the proposal by CMOs for increase in tariff could be considered if applicable.

The CMOs said they always strived to comply with all applicable license conditions, rules and regulations including provision of requisite level of quality, network and service availability.

However, “some critical economy-wide factors” were directly impeding and would likely severely constrain the operators’ ability to meet the existing quality obligations/performance indicators, as well as network rollout obligations under the new license conditions.

Pointing out increasing electricity load shedding, particularly in rural areas, the CMOs said that they were finding it almost impossible to cope with the quantum of power outages with their existing backup, including generators and batteries.

On top of that, the rapidly escalating fuel prices were placing extra constraints on provision of backup generators for base transceiver station (BTS) sites, round the clock. (BTS facilitate wireless communication between user equipment (UE) and a network).

The letter went on to add: “This extra fuel consumption for back up purposes is also contributing to further demand for fuel rather than supporting the government of Pakistan objective of rationalising fuel consumption across the board in these testing times.”

The CMOs also raised the imposition of 100 percent cash margin on letters of credit for imports by the State Bank of Pakistan (SBP). The SBP raised the LC cash margin on all telecom equipment import from 10 percent to 100 percent to curtail the outflow of forex reserves and bring the imports down to manage the trade deficit.

“The imposition of increased LC cash margin has not only severely dented our ability to rollout more sites in order to meet the licensed QoS requirements, it also drastically impedes addition of more backup capacity to counter these extended power outages,” the CMOs said.

The letter continued to express serious apprehensions about meeting licensing quality of service requirements, key performance indicators, and network rollout targets. “We are taking this opportunity to timely inform PTA and trust that the authority will take into account the circumstances beyond our control while evaluating the license compliance and enforcement matters.”