ISLAMABAD: Chairman Pakistan Telecommunication Authority (PTA) Major General Amir Azeem Bajwa (retired) said that due to increase in tax rate, depreciation of rupee and inflation, the operational cost of telecom companies increased and resultantly their profitability declined.
“The government directly collected $ 2.24 billion from telecom operators on account of spectrum auction and license, besides half of it indirectly during the last two years (2019-21) and would require Rs 50 billion additional to upgrade infrastructure and meet the upgraded benchmark of quality of services only,” said Bajwa, while briefing the Senate Standing Committee on Information Technology and Telecommunication.
The committee met with Kauda Babar in the chair here on Tuesday, recommended for tax exemptions to the telecom sector.
The PTA chairman informed the committee the 5G spectrum auction in the country is expected by the end of the current year or in the first quarter of the next year.
The PTA chairman, while briefing the committee about the plan to auction spectrum said that the government has constituted an advisory committee headed by the finance minister. After finalising the plan, consultant of international repute would be hired.
Leader of the House in the Senate Dr Shahzad Waseem said that why only one operator i.e. Ufone participated in the last auction. The PTA chairman said that it was the only operator left in previous auction and was needed spectrum. However, other operators had invested huge amount of $1.3 billion in license renewal in 2019, besides got spectrum in earlier auctions. Further, the other operators likely have focused on upcoming 5G auction and did not participate in the latest auction.
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Dr Waseem also raised questions, while saying that the spectrum generated $ 280 million; however, Etisalat have 26 percent share with management in the PTCL, which apply that only $70 million was generated from private investor, while the rest was government money given to the government.
The committee member asked about the reality in Telenor Pakistan merger, the chairman PTA said that the company had announced that they are looking for market consolidation in the region.
“I think the company is still looking to acquire,” he added. To which committee members said that the government should engage with the company as the exit of investor is not good besides, the number of operators would reduce and consumers may suffer. The chairman PTA said that the government is always engage to facilitate telecom operators; however, the industry has some issues which have reduced their profitability. Pakistan is still an attractive market with huge subscribers.
The Ministry of IT sought help from the Standing Committee to restore the tax exemption. The standing committee assured cooperation and recommended for tax exemptions to the telecom sector.
Senator Afnanullah Khan asked about the talks with SpaceX and Starlink. On which, the chairman PTA informed the committee that talks are underway with StarLink regarding the provision of cheap internet; however, they have to complete regulatory obligations. As soon as regulatory issues are settled, StarLink will launch its service, which will provide cheap internet access, especially to people living in remote areas.
The National Information Technology Board Act, 2022 approved by the National Assembly was reviewed.
Officials from the Ministry of Information Technology and the NITB told the committee that the purpose of the proposed bill is to make the NITB an autonomous body, so that the work of the institution can be further expedited and improved by removing obstacles. Officials said that being a subsidiary, the NITB often faces financial delays, which is hurting the fast-growing sector, especially IT. Senator Dr Shahzad Waseem, Leader of the House in the Senate, asked what would be the effect of the NITB’s autonomous status and how it would benefit the country.
Responding to this, the ministry officials said that the NITB has been successfully providing quality IT services to the government of Pakistan including e-office, NCOC application, and others. He further said that the NITB was also working on human resource development. Before embarking on any project, one has to go through a long process to get PSDP grants which is not suitable for a field like IT.
Creating an autonomous body will eliminate unnecessary delays as well as improve the decision-making process. The chairman of the committee directed that the proposed bill would be reviewed clause by clause in the next meeting of the committee.
The committee expressed dissatisfaction with the NITB’s Track Application.
The NITB had introduced a pass-track application for international travel during the corona epidemic.
Copyright Business Recorder, 2022
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