The government deal of handing over Pakistan Telecommunication Company Limited (PTCL) to Etisalat has started hurting the "telecom deregulation policy 2004" that supported the phenomenal increase of telecom sector and grabbed potential foreign investment in the country.
This step has raised some serious concerns in the telecom sector and its allied industries over the restrictions on "open licensing regime" for the next few years and secondly unjustified broadband bandwidth tariff structure.
The PTCL is the country's only and largest service provider of all kinds of telecom and allied services to the consumers and the allied sector.
Sources told Business Recorder that the allied telecom industry had concerns about the working of telecom watchdog agency (Pakistan Telecommunication Authority) as a regulator considering its marginalised role in finalising the privatisation deal of the country's largest phone utility.
The PTCL's privatisation deal was handled at the highest "government level" in which the power corridors had to accept a number of terms and conditions from its buyer (Etisalat), which could also seriously hurt the growth of various telecom services in the country.
Experts believed that such undisclosed deal further left the country's consumers at the mercy of a new "monopolistic regime" that was also a clear-cut negation of telecom deregulation policy.
The worst sufferers are those allied industries that use the PTCL infrastructure and service like internet service providers (ISPs), information technology & enable services (ITeS), business process outsourcing (BPO), call centres and software exports.
The experts said, in Pakistan the internet and data communication industry was deregulated in 1994 much earlier than in India where such step was taken in 1999.
"Unfortunately, we are unable to nurture such a time span of five years than India, and we are far behind from their service level, overhead cost and growth of broadband services," they said.
The unfriendly aspect is the continuos non-professional approach of the government officials, dealing and planning such broadband policies and above all high tariffs that kept the growth at a very slow pace.
The Ministry of Information Technology and Telecom announced the Broadband Policy 2004, which defines that the broadband access is widely recognised as a catalyst for the economic and social development of a country.
Broadband rollout has a more powerful impact than the spread of basic telephony.
The policy further says that the country should achieve DSL user base to 100,000 by December 2006, but the tariff is considered a major factor in the slow growth of such services.
"Presently," the sources said, "there are only 15,000 DSL broadband connections activated in the country after the announcement of the policy. It means that at the current speed of deployment the conservative target for 100,000 DSL users set by the government will be achieved by 2013."
According to Internet Service Provider Association of Pakistan (ISPAK), the tariffs for Japan, South Korea, Hong Kong, Singapore, Malaysia and India reveal that India is most uncompetitive in international and domestic bandwidth pricing.
The ISPAK did a price comparison with the least competitive country in international and domestic bandwidth pricing ie India and defines that in Pakistan, "We are 240 percent higher in DS3 (45Mbps) international IPLC price, 226 percent higher in STM-1 (155Mbps).
"A 155-mbps circuit of 1000KM will cost 94,000 dollars per month in Pakistan whereas in India, it will cost only at 38,000 dollars," said the ISPAK.
The ISPAK also observed that there were some serious disparities in tariffs in Pakistan. For example, a full circuit of 155-mbps will cost 76,000 dollars per month, whereas 155Mbps 1/2 circuit (IPLC) will cost 185,000 dollars.
Another interesting fact in tariff disparity is that an international full circuit of 155-mbps from Pakistan to United Kingdom is priced at 76,000 dollars, whereas the same capacity between Karachi and Islamabad costs 123,500 dollars per month.
The ISPAK further said no action had been taken by the Ministry or the PTA to address this great anomaly in tariffs, which was the greatest impediment in the proliferation of broadband services in Pakistan.
By January this year, 96 percent internet users were using broadband in South Korea; 47.75 percent in China; 14 percent in India; seven percent in Malaysia; and only 0.63 percent in Pakistan.
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