Province to district level: Eying Rs3bn income, PTA set to amend data CVAS licenced area

ISLAMABAD: Pakistan Telecommunication Authority (PTA) is all set to amend licensed area/jurisdiction of Data Class Value-Added Services (CVAS) from nationwide/province to district level, which is expected to generate additional revenue of around Rs3 billion and create thousands of jobs by expanding internet connectivity to smaller towns and villages across the country.

Official sources revealed that around 5,000 people have shown interest in acquiring the Data CVAS license at district level, which is comparatively simplified entry-level license for the provision of internet services in the country and increase broadband proliferation.

Sources said that over the span of two decades, significant changes have unfolded in the market dynamics and technological landscape, reshaping the environment profoundly. These advancements have rendered the existing scope of Data CVAS License not to be corresponding to the evolved technological shifts. Therefore, a revision in the Data CVAS License for provision of internet services in the country is imminent.

PTA all set to impose fee for processing, issuance of CoC

Furthermore, startups, entrepreneurs and young technical graduates showing keen interest in acquiring small area license beside Cable TV operators who are interested to offer quality internet services utilising their current OFC infrastructure, established under PEMRA’s Cable TV license.

However, under the prevailing regulatory framework, they are obligated to acquire FLL licenses from PTA for such services.

Nonetheless, they exhibit reluctance towards pursuing FLL licenses due to the compulsory requirement of providing voice services and associated obligations tied to FLL licenses.

According to the proposed template the Licensee shall provide Licensed Services to the End Users by acquiring access/IP Bandwidth from Local Access Provider (LAP) and last mile infrastructure acquired from Local Access Provider (LAP) or Infrastructure Licensees (IL) Or last mile infrastructure established under its own “Cable TV Distribution” License issued by the Pakistan Electronic Media Regulatory Authority (PEMRA).

Further, the Licensee can lay down its own purpose specific transport/Local Loop infrastructure just for providing Licensed Services, after three months of failure to obtain the desired infrastructure from any existing LAP or IL, subject to prior approval of the Authority. Provided that licensee does not hold PEMRA’s Cable TV distribution license.

According to the current regime the jurisdiction/licensed area are nationwide and province while it is proposed to have only one district level CVAS license by one company.

Further, currently term of license is 15 years which is proposed to reduce to 10 years. Application processing fee is currently Rs5,500 and is proposed to be Rs20,000 in the amended regime. Initial licensee fee nationwide is Rs300,000 and Rs100,000/50,000 for province and it is proposed to be Rs300,000. Annual License Fee (ALF) is currently 0.5 per cent of Adjusted Gross Revenue while in the revised regime it would be Rs100,000 for first year, with increment of 10 per cent for each subsequent year.

This License does not authorize: (a) The provision of Telecommunication Services outside the Licensed District; (b) To establish, operate or maintain a public switched telecommunication network, or telecommunication infrastructure, except for the arrangements specified; (c) The interconnection of the Telecommunication System of the Licensee to the Telecommunication System of a service provider that provides telecommunication services outside Pakistan; (d) To provide wholesale bandwidth services directly or indirectly to any person or entity including any other licensees for the purpose of further reselling. (e) The origination, transportation and/or termination of voice; (f) Connection oriented switching without specific approvals from the Authority; (g) Distribution of radio or television programming by means of a cable television transmission system, except pursuant to a separate license or proper authorization from the concerned authority, ie, PEMRA; (h) Broadcasting of radio or television programming, except pursuant to a separate license or proper authorization from the concerned authority, ie, PEMRA; (i) The establishment, maintenance or operation of a Telecommunications System to provide any Telecommuni-cation Service that is not authorized in this License or restricted by the Authority from time to time; (j) To such acts which may jeopardize the security, beliefs and heritage of Pakistan and its relationship with its allies around the world.

This License makes it mandatory for the Licensee to establish: (a) ‘Service Level Agreements’ (SLAs) with LAP and/ or IL, for Access/IP Bandwidth and last mile connectivity. All such SLA shall be approved by the Authority before commencement of Licensed Services and SLAs for such network transport contracts shall include minimum following conditions: i. Scope of the Agreement, ie, Access and/or Infrastructure

ii. Area iii. Pricing Mechanism for Services - Access and/or Infrastructure iv. Maintaining the Quality of Services (QoS) v. Dispute Resolution Mechanism vi. Force Majeure. A deep analysis reveals that this will put a check on illegal band selling to cable operators, opportunity to small investors having technical knowhow, fixed broadband proliferation in rural areas etc.

These operators if grow their business and desires to expand the network to second district, will be required to obtain Local loop license. Thus overall will expand the FTTH services from 3 million to approximately 10 to 12 million users within short span.

Copyright Business Recorder, 2024