ISLAMABAD: The government has approved Telecom Infrastructure Sharing Framework (TISF) which would provide a regulatory mechanism for licencees to share their active as well as passive telecom infrastructure in a fair and competitive manner.
The framework is developed by the Pakistan Telecommunication Authority (PTA) in consultation with the Ministry of Information Technology and Telecommunication (MoIT&T) and the telecom industry.
Telecom network deployment involves heavy CapEx and OpEx liabilities for operators, which is a barrier to increasing mobile broadband proliferation.
The PTA stated that the approval of the TISF is a major step forward for the growth and sustainability of telecom sector in Pakistan. It is expected to lead to significant reductions in the cost of deploying (CapEx) and operating (OpEx) telecom networks, which will ultimately benefit consumers in the form of lower prices and better as well enhanced services.
There was a great need for telecom infrastructure sharing in Pakistan due to increasing inflation, low Average Revenue Per User (ARPU), rising fuel prices, revenue challenges, massive CapEx demand for 4G and 5G expansion, connecting remote areas, and cost-effective capacity growth for nationwide coverage.
Telecom Infrastructure Sharing acts as a jump-start for new services with larger coverage footprint and early Time to Market (TTM) of innovative products. The Framework heightens competition among operators to focus on service differentiation and enhancing customer experience since part of underlying network is shared.
The Telecom Policy 2015 states that infrastructure sharing (passive and active) will be provided based on the regulations and guidelines established by PTA, in consultation with the federal government, on the principles of neutrality, non-discrimination and equal access.
According to the framework, the initial discussions on network sharing are easy and promising but are very difficult and complex to setup and may fall short of anticipated benefits. The key to success is careful and meticulous planning based on extensive deliberations. Some key limitations, risks and challenges for network sharing include: (i) risks: Strategic lock-in, future merger/divestment becomes complex, high termination costs and asymmetric benefits, (ii) limitations: Loss of control and independence, competitive disadvantage, growth limitation and high assets write-off, (iii) challenges: deal and integration complexity, complex governance, staff resistance, regulatory scrutiny and stringent approval processes.
The framework further noted that Telecom Tower Provider (TTP) licencee shall be authorised for Distributed Antenna System (DAS) for IBS, whose components include indoor antennas, jumpers, cabling (co-axial/fibre), connectors, taps/splitters, multiplexer, combiners, couplers, attenuators, grounding/earthing and associated power equipment (if any) and including such “Telecom Infrastructure Facility” as the authority may require by regulation. (a) the licence may be amended/modified in accordance with Section 22 of the Pakistan Telecommunication Re-Organization Act, 1996 (Amended 2006). (b) Following fee structure shall be applicable: National: $50,000 (or its equivalent in Pakistan rupees of the value prior to licence effective date) for 15 years, provincial (excluding Balochistan): $20,000 (or its equivalent in Pakistan rupees of the value prior to licence effective date) for 15 years, Balochistan: $5,000 (or its equivalent in Pakistan rupees of the value prior to licence effective date) for 15 years.
Copyright Business Recorder, 2023