‘Emergency stimulus package’: Telecom industry seeks policy interventions

ISLAMABAD: The telecom industry has sought urgent policy interventions including staggering of licence payments and denominating spectrum payments in rupees as a part of the proposed emergency stimulus package, which will provide critically-needed fiscal space to the operators and enable them to continue to serve over 195 million subscribers.

Staggering of licence payments over 10 annual instalments rather than five is critical to ensure the industry’s survival, said Mudassar Hussain, vice president, Public Policy and Regulatory Affairs, Jazz at Pakistan Telecommunication Authority (PTA)’s Consumer Conference 2022.

The PTA organised Consumer Conference 2022 with the theme “Consumers First” Thursday.

Head of the Prime Minister's Strategic Reforms Salman Sufi was the chief guest.

The CEO USF Pakistan, representatives of the IT and telecom industry, consumer rights groups, and the public also attended the event.

Pakistan’s telecom sector is currently undergoing its toughest times, due to an exponential increase in the cost of doing business, constantly increasing USD spectrum pegged instalments being one of the key contributing factors, said Hussain.

The government’s decision to link the spectrum price to the US dollar instead of the rupee, he said, was a pressing concern for local cellular mobile operators and the financial health of the sector, as it had remained unaddressed in all spectrum auction policies and license renewals. The untenable scenario has now pushed the country into a digital emergency.

In case of cellular mobile operations, the customers are charged in rupees. The revenue is also earned in rupees, which is then re-invested by the operators to pay for most of the costs including spectrum price and equipment imports denominated in dollars. Denominating spectrum costs in dollar exposes the operators to huge currency devaluation risk. Likewise, annual spectrum licence instalment payments become unpredictably expensive by each passing year. This limits operators’ ability to plan for network, service and even further spectrum investments.

He further said that the ongoing rupee devaluation has further affected an already exorbitant license/ spectrum renewal price for mobile operators and the industry players are facing a double jeopardy in such harsh economic conditions prevailing in the country where both spectrum price in USD has escalated coupled with the devaluation in PKR.

While in dollar terms the increase in spectrum price for individual frequency bands, may not seem substantial over the years however when seen in overall package of frequencies in a license, the prices have considerably escalated even in USD terms. Case in point is the 2019 renewal price of ~USD 450 million for USD 291 million licenses issued in 2004 to Telenor, Warid and Zong. Further to this there has been an additional massive surge in rupee terms due to local currency devaluation. For instance, the cost of 1 Mhz of spectrum in 1800 band increased from US$ 21 million to US$31 million between 2007 to 2022, it translates into an increase of 388% in rupee terms from 1.27 billion to 6.65 billion. He said telecom industry invested $20 billion during the last 20 years in the country and is the only growing industry with zero investment of the government.

He said that as a part of the proposed emergency stimulus package, the industry seeks urgent policy intervention such as staggering of license payments over 10 annual instalments rather than five and denominating spectrum payments in rupees which will provide critically-needed fiscal space to the operators and enable them to continue to serve over 195 million subscribers.

During his talk, he also acknowledged telecom industry’s partnership with the Pakistan Telecommunication Authority and the Ministry of Information Technology & Telecom to help mitigate the current challenges and to ensure consistent improvement in quality of services and support Pakistan’s digital inclusion objectives.

Joining the event virtually, Head of PM Strategic Reforms said this conference provides an excellent opportunity to directly obtain consumer feedback especially on the issues the public is facing. He also mentioned the recent measures undertaken by PTA such as opt out/ unsubscribing mechanism for unsolicited/ telemarketing messages.

He also mentioned that the government is working with stakeholders in the light of the prime minister's vision of a digital economy to ensure the convenience of the people. Citizen data privacy law will also be enacted in the near future which will ensure unprecedented data protection of citizens and businesses.

Addressing the conference, Chairman PTA, Maj General Amir Azeem Bajwa (retired) said that the PTA is cognizant of telecom consumers’ needs and is taking every step to facilitate them in resolving their issues. He said that organizing this consumer conference is yet another serious effort by PTA to take consumer feedback directly from the public. Moreover, PTA is working on improving consumer satisfaction level against the resolution of their problems.

Speaking at the occasion, Member (Compliance and Enforcement) PTA, Dr Khawar Sidique Khokhar highlighted that PTA, being a progressive regulator with a reconciliatory approach, has improved consumer experience and facilitated industry progress.

Presentations were also given during the conference. CEO USF Pakistan Haaris Mahmood Chaudhary apprised the audience about USF projects and highlighted USF’s efforts in eliminating digital disparities in urban and rural areas.

Representatives from Jazz and PTCL gave an overview on the current telecom industry landscape and initiatives undertaken to provide quality service, respectively.

DG CPD Abdul Samad and DG Enforcement, Brig Muhammad Shuaib from PTA gave an overview on consumer complaints received to PTA and initiatives undertaken with regards to Quality of Service, illegal SIMs, etc., respectively.

Representatives from Consumer rights groups - Mian Irfan Akram, Punjab Chairman Consumer Association of Pakistan (CAP) and Kamal Zada, Program Coordinator, Consumer Rights Commission of Pak (CRCP) appreciated the PTA for its focus on consumer issues and expressed hope that PTA and telecom industry will resolve core problems, such as quality of service, faced by users.

Copyright Business Recorder, 2022