PTA Explains How Increased ASR Helped the Industry

Pakistan Telecommunication Authority has denied the reported loss of Rs. 30 billion per year, as claimed by a report appeared in The Dawn yesterday.

PTA in an official statement said that increased approved settlement rates or ASR has resulted positively for funds collected for Universal Service Fund (USF). PTA in its statement said that increased ASR helped broadband enrichment in the country along with many other projects that are running on the shoulders of ASR.

PTA has said that its decision of increasing ASR is appeal-able in the court, thus anyone having any reservations can challenge authority’s decision.

PTA further maintained that international incoming traffic was not impacted due to hike in ASR, however, PTA didn’t mention the stats of illegal traffic during the years.

Following is the complete press release issued by the authority.

The increases in Approved Settlement Rates (ASR) are made on the basis that the level of ASR directly affects the contributions towards USF for proliferation of telecom services and the same was increased to help the Government to expand the USF projects in remote areas.

Number of projects has lately been completed by USF Fund in Sindh and Balochistan. Five Optical Fibre projects costing Rs. 4.5 Billion and Twelve Broadband projects costing Rs. 6.35 Billion have already been awarded.

Owing to this, the broadband proliferation has increased manifold in Pakistan showing a growth of 150%, thus putting Pakistan amongst the top ten countries in the world in terms of growth. The broadband subscribers have reached approximately 0.8 Million. Therefore as reported in certain section of the media, government has not suffered a loss of Rs 30 billion on account of collection of Access Promotion Contribution (APC).

On account of APC for USF, PTA was collecting:

  • Rs.12 million/month in January, 2005
  • Rs.85 million in October, 2007
  • Rs.86 million in May, 2008
  • Rs.1083 million/month in Feb 2009
  • Rs.1564 million/month in Feb, July, 2009

In fact, as data shows, changes in the APC and ASR over the period of time have helped in increase of revenues to the USF Fund.

Historically, when ASR was at its minimum level from October 2007-April 2008, the average monthly minutes were 499 Million per month. In May 2008, when the ASR was increased to 10 cents/minute, there was no negative impact on the traffic pattern due to the installation of equipment to curb grey traffic.

From May 2008 onwards, average incoming traffic remained at 500 plus Million minutes per month, resulting in an increase in APC for USF contribution of US$ 14 Million per month (May 2008-Jan 2009) which further increased to US$ 22 Million per month from February 2009 to June 2009 when PTA increased the ASR to 12.5 cents/minute.

Since the reported traffic never reached to the level of one billion minutes per month even when ASR was at its minimum level, the assumption that the legal traffic fell below 400 Million minutes per month, thereby resulting in a loss of Rs 30 Billion, as being projected in the media, is not based on facts.

Another reason for increase in ASR is that the earlier reductions in ASR were not passed on to the end users by foreign operators who continued to charge high tariffs from users calling Pakistan from abroad and the same was conveyed to PTA through complaints from Pakistani expatriates.

The Telecom Act 1996 and APC Regulations empower PTA to revise ASR/APC which PTA carries out after the due consultation with telecom operators through a fair and transparent method. And the decision of PTA is appealable in the courts as well.

PTA conducted 28 successful raids, on grey traffickers, since March 2009, which included small and big gateway operators. Number of persons including foreigners were also apprehended. In the campaign against illegal telephony 20,092 Mobile SIMs were blocked. Furthermore, licenses of Local Loop operators and LDI operators were suspended, while LDI operators were also fined on this account. Thousands of operators/equipments involved into grey traffic are being blocked every month. PTA has saved Rs.1.5 billion (US$ 18 Million per month) so far by taking action against the illegal operators and after installation of latest equipment in April 2008 at PTA.

It is pertinent to mention here that PTA has established a dedicated Vigilance Cell of experts whose expertise are well recognized in monitoring such illegal telecom traffic with the help of state-of-the-art equipment to curb the grey traffic. International regulators have shown their interest to acquire similar system to curb grey traffic in their respective jurisdictions.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK

  • maybe you dont know this but increment in ASR was solely decided by chairman sb. no input was taken from member technical or member finance, which is itself a violation of act.

    this shows how comprehensive this decision could be if made by a single person. Chairman sb is for sure getting a cut from Malik. how miserable the leadership is in our country.

    above clarification is just a drama as USF is getting lot of funds from cellular companies and is no way dependent on ASR

    Pakistan zindabad

  • USF shouldn’t be linked with ASR as PTA is claiming. This is in fact a very good tactic that shows cunning minds behind this. ASR has affected incoming calls to Pakistan and has forced Pakistanis overseas to use grey telephoney operators abroad. Thus legal routes are getting very less traffic and grey routes traffic is increasing everyday. So there is an immediate need to reduce ASR for legal routes so that grey telephony operators are forced to legally pay for incoming traffic.

    India did this and ther loved ones are not only in contact but VoIP business is rapidly increasing in India. In Gitex Dubai I saw only Indian VoIP operators and not a single Pakistani VoIP operator. Govt. of India is on winning end adopting a policy complete opposite to what Dr. Yaseen did here in Pakistan.

  • I think Propakistani’s allegations are wrong. Due process was followed and industry was consulted. As a mattter of fact this upward revision revived some ldis that had gone out of business. Similarly, contribution to usf also increased and traffic volumes also increased.

    Only with passage of time ldi operators again started undercutting and masking of traffic started with squeezing of margins.

    To bring things on record the due process started during the musharraf govt and it wa spearheaded by ptcl. Presentations were given to president, moit as well as ministry of finance.

    Rehman malik’s company came much after this decision.

    Facts are well documented with pta even if we don’t like what they say.

  • well its simple.
    look at the traffic of all LDI operators in pakistan pre Malik era.
    then came the increased ASR.
    Look at the legal LDI traffic now? its less than 5% of what it was before ASR was increased.
    the only and only reason to increase ASR was to make Grey traffic possible so they can fill their pockets.

    over all incoming international minutes to pakistan have increased but none of the legal LDI operators are seeing getting any or seeing any increase in their incoming traffic.

  • Well Mr bashir your data is wrong. Traffic has increased since revision of asr.

    I am no fan of rehman malik but unlike the ministers of musharraf govt he is not involved in grey traffic.

    What his company is doing has no legal implication for the company as they negotiate very low rates with ldi operators who bring traffic by under cutting the permissible rates approved by pta.

    Rehman malik may be influencing ldi ops to give him a low rate but the onus in this case lies with operators as they have the license to bring traffic.

    I wonder why Dawn is silent about the illegal international traffic that was brought in the days of musharraf through NTC?

    It is quite a complicated subject and unfortunately not even many telecom professionals understand it

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