The government has decided to slash Mobile Termination Rates (MTRs) from the current Rs0.80/min to Rs0.70, which would help keep tariffs low for consumers.
The MTRs play a critical role in driving retail tariffs, especially for off-net calls.
In view of the changing market structure of the cellular mobile segment and considering that the last change in MTR was made in 2010, a review of the existing MTR at PKR 0.90/min was required in Pakistan.
Based on comments, hearing and meetings, the authority decreased the MTR for all types of calls local, long distance and international incoming calls terminated on mobile networks from other mobile networks or fixed networks from Rs0.90 to Rs0.80 on 1st January, 2019.
Pakistan Telecommunication Authority (PTA) official documents revealed that this rate will be further decreased to Rs0.70 in 2020.
Subsequently, the MTR will be reviewed in the coming years in line with international best practices.
It is expected that the revised MTR will help keep tariffs low for consumers.
The documents further revealed that the PTA carries out a regular exercise to verify and check whether cellular mobile operators (CMOs) are charging their customers retail tariffs according to advertised rates.
Balance reloads; balance inquiries and helpline charges were also checked during the surveys.
The PTA conducted a billing verification survey in Karachi and Islamabad during the fiscal year 2018-2019 and results showed that the CMOs were charging as per advertised tariffs. The Supreme Court of Pakistan had suspended sales tax, withholding tax and service charges in June 2018 on the pre-paid reload/recharge and usage.
Cellular CMOs implemented the order of the Supreme Court in letter and spirit and stopped deducting taxes (GST/FED and WHT) and services charges from prepaid consumers.
Resultantly, pre-paid subscribers got 100 percent balance (ie, Rs100 upon recharge of Rs100).
However, the same taxes were restored by apex court on 24 June, 2019, resultantly; the CMOs started levying taxes on their packages.
After restoration of taxes, it was observed that due to competition in the market, some CMOs reduced their mobile data tariff and did not pass on the impact of taxes to their consumers.
The CMOs also started incentivising their subscribers by offering more on-net minutes, SMS and data bundles.
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