PTA actively pursuing broader targets for telecom services development

ISLAMABAD: Pakistan Telecommunication Authority (PTA) - dynamically engaged in changing telecom landscape of Pakistan - has tackled every new challenge with determination, keeping interest of the country at heart of its regulatory decisions.

The Authority sustains on research in regulation, technical astuteness, harmonizing competition and discharging its social responsibility with the patronage of the Government of Pakistan.

Under patronage of current democratic government, PTA has been actively pursuing its broader objectives and targets for the development of telecom services and protection of consumer rights. It believes that performance of telecom sector is true reflection of its successful regulatory initiatives and reforms.

The Authority in its latest report, highlighting industry issues and way forward said today, Information and Communication Technologies (ICTs) solutions, being offered on mobile broadband, are making a big difference in every walk of life.

However, there are several industry challenges that are needed to be addressed in near future.  It is indeed a challenge to keep up with the rapid modernization in telecom systems and to bring latest ICT innovations in Pakistan.

Rationalization of Taxes in telecom sector was a major challenge being faced by industry for past few years. After coordinated efforts of PTA and telecom industry, Withholding Tax has been brought down to 12.5 per cent from 14 per cent. However, the Withholding Tax @ 12.5 per cent on every mobile recharge is still high because majority of subscribers fall below threshold of being a tax payer and hence, cannot get paid amount adjusted in their annual tax returns.

Similarly, Federal Excise Duty (FED) has also been decreased to 17 per cent from 18.5 per cent. However, the tax rates by Provincial Revenue Authorities are still quite high and should be reduced, following the example of Federal Capital.

Harmonization of Federal and Provincial Tax Laws is important to resolve sales tax collection issues and avoid undue litigation between operators and the Federation. Telecom sector should be granted the industrial undertaking status so that the mobile operators are able to adjust the income tax paid at time of import of telecom equipment, which is treated as a final tax liability.

High custom duty and other taxes on import of mobile handsets and telecom equipment also impede mobile penetration.

Moreover, the report said the intense price wars among the operators topped with fierce competition with the Over-the-top (OTT) services and grey traffic is shrinking the Average Revenue per User (APRU) of the industry.

Telecom access and expansion is hampered by the lingering Right of Way (RoW) issues, utility infrastructure and procedural delays in the approvals process at provincial government's level.

PTA has exerted tremendous efforts to improve the national and international connectivity of the country by providing regulatory facilitation to interested operators.

The national fiber optic deployment has increased manifolds whereas the results of Next Generation Mobile Services (NGMS) spectrum availability are prominent in every walk of life.

PTA is ready to face emerging challenges of the upcoming resource demands by refarming the available spectrum. Moreover, the operators are also investing in Fiber-to-the-Home (FTTH) projects to provide fast, good quality and reliable communication to consumers.

PTA recognizes the industry issues and plans to resolve the pending challenges aggressively in next two years that will bring significant innovations in the ICT and telecom sector of Pakistan.

The advent of 3G and 4G LTE services has already created a phenomenal buzz in the electronic and mobile application and service delivery. The operators are recognizing the fact that data is the next big thing and accordingly, data-centric services are being rolled out for the people.

Apart from PTA's current initiatives explained earlier in this report, PTA has also been entrusted with important tasks under Telecommunication Policy 2015. Efficient spectrum management is important to ensure quality of service and generate substantial revenue for the economy. Hence, PTA is working on "Spectrum Refarming" framework that will enable PTA and Frequency Allocation Board (FAB) to introduce new technologies in the country.

Similarly, spectrum harmonization with International Telecommunication Union (ITU) standards, regulations and recommendations will also be carried out along with publication of rolling spectrum strategy at end of each year. In parallel to that, PTA has also undertaken initiative to review the existing licensing regime and is in process of hiring an international consultant for assisting in devising the best possible licensing framework that facilitates market entry and adoption of new technologies.

The revised licensing framework will also consider the regulation of OTT and VoIP services that are increasingly replacing traditional voice communication.

The report said to ensure smooth flow of information and continued communications during a disaster situation, PTA is also developing a comprehensive Regulatory Framework for Disaster Management in consultation with ITU that shall be followed by telecom operators and other disaster management stakeholders during an emergency.

The smuggling and use of the unauthorized, non-approved terminal equipment in the country shall be handled by promulgation of Regulations and deployment of a state-of-the-art software solution. The proliferation of technology should not compromise on health and safety of citizens.

Therefore, PTA is developing an environmental regulatory framework for sector consistent with relevant laws, policies and regulations at Federal and Provincial level. Framework on "Regulatory Remedies and Solutions for Provision of Services by WLL Operators" will be finalized and implemented for betterment of ailing Wireless Local Loop (WLL) sector.

PTA is also committed to ensure roll-out of NGMS services under licenses issued to cellular mobile operators. Security of Data and Critical Information Infrastructure (CII) is also an important issue for Pakistan due to its geo-political importance. In this regard, guidelines will be prepared for implementation by telecom licensees.

In the wake of all the initiatives and regulatory actions, it is of utmost importance that the ICT developments in Pakistan are depicted on national and international level. Therefore, PTA has engaged the Pakistan Bureau of Statistics (PBS) to carry out a national survey for measuring true level of ICT development in Pakistan. Subject to the issuance of Policy by the GoP, PTA has plans to auction more spectrum in 1800 MHz band for NGMS services.

PTA has also carried out detailed analysis regarding release of NGMS spectrum in Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB). Once Policy Directives are issued by AJK & GB Councils, PTA will conduct NGMS licenses auction in these areas.

Local loop sector has a lot of potential for investment as competition is still not matured in the fixed line and wireless local loop segments while on other hand, successful adoption of mobile broadband services has created a big room for investment in development of localized services and local content, especially the application development and digitization of services which can be a lucrative opportunity for the national and international content developers.