Pakistan Telecommunication Authority (PTA) on Friday directed Pakistan Telecommunication Company Limited (PTCL) to implement the revised bandwidth tariffs which were determined following a series of meetings with all stakeholders.
The Authority has issued a detailed determination on bandwidth tariffs, saying that it would have positive impact, particularly on the broadband proliferation, and generally on overall telecommunication.
PTA Chairman Shahzada Alam said that the industry had been approaching Pakistan Telecommunication Authority for quite some time to regulate the bandwidth tariffs.
They had been emphasising that the tariffs charged by Pakistan Telecommunication Company Limited were abnormally high and thus did not give them any competitive advantage in international market.
Moreover, some investors had also contested that the current tariff structure was discouraging them to make investment in Pakistan, as it was cheaper to acquire these facilities from other Asian countries.
This scenario was hampering the broadband proliferation and affecting the growth of IT-enabled services in Pakistan that are heavily dependent of bandwidth tariffs.
Pakistan Telecommunication Authority had earlier issued a determination on this issue on June 23, 2006 directing Pakistan Telecommunication Company Limited to revise its bandwidth tariffs. PTCL, however, filed an appeal with Lahore High Court, Rawalpindi Bench.
Lahore High Court on August 7, 2006, after mutual agreement between the Authority and PTCL, directed the Authority to decide the case strictly in accordance with law within 60 days.
Pakistan Telecommunication Authority subsequently issued a detailed consultation paper on the subject and received the feedback from the stakeholders. In order to give full opportunity to stakeholders the Authority also held hearing on the subject on September 22, 2006 and October 5, 2006.
The hearings were conducted by the Authority comprising Chairman Pakistan Telecommunication Authority Major General Alam Malik, Member Finance Syed Nasrul Karim A Ghaznavi and Member Technical Dr Mohammad Yasin. It was attended by Senior Management of Pakistan Telecommunication Company Limited, Wahaj-us-Siraj, Convenor ISPAK (North), Sohail Qadir of Worldcall, Kamran Malik of TWA and representatives of the other telecom operators.
The operators presented their recommendations and suggestions for the growth of telecom and broadband services. The Authority after considering the arguments of all stakeholders issued a fresh determination and announced that the bandwidth tariffs of Pakistan Telecommunication Company Limited should be in accordance with the international benchmarks of countries where effective competition exists.
As for International Private Leased Circuit (IPLC) tariffs effective from January 1, 2007 the E1(2M bps) for ISPs will be US $2,100 instead of US $3,000 whereas for voice operators it shall be US $2,300 instead of US $2,852. Similarly for DS3 (45 M bps) ISPs will pay US $16,800 instead of US $48,000.
STM 1 (155 M bps) price will be US $48,300 and 52,900 for ISPs and voice licenses respectively. In addition to the above measures the Authority has also directed Pakistan Telecommunication Company Limited to provide E1 (2M bps) at US $1,000 on shared basis from January 1, 2007 as being provided by various other countries such as India.
Similarly data & voice services rates of Internet Protocol (IP) have also been reduced significantly from January 1, 2007. E1 rates will be US $1,500 instead of 1,600, DS3 will be US $24,000 instead of 25,000 and STM 1 will be US $46,500 instead of 60,000. Furthermore IP tariffs for Voice Services for Long Distance and International (LDI) operators have also been revised and reduced by 31 percent to 48 percent which would be effective from January 1, 2007.
The DPLC tariffs for voice services have also been reduced by 20 percent to 30 percent.
The decision of the Authority will have a far-reaching implication for the growth of telecommunication market and investment in the Information Technology & Telecom Sector in the country as bandwidth cost is a critical input for the investment and proliferation of broadband services.
At present Pakistan has around 60,000 broadband subscribers and according to ITU's recent report Pakistan's internet tariffs in West Asia are amongst the least affordable countries.
With the reduction in bandwidth cost the broadband service providers will be encouraged to offer higher bandwidth to their customers thus resulting in increase in usage of broadband services.