Pakistan Telecommunication Authority has been long looked for to take necessary measures to cap the price war amongst the cellular operators in Pakistan, to make sure that these lowering tariffs don’t hamper the industry at large.
Price war, usually believed to benefit end users, has in reality caused a customer more damage than bringing him any relief. A Pakistani cellular user with lowest call rates in the world has to compromise over quality, inferior customer support, additional charges (every other month now) and lack the innovation that mobile operators could bring into their products.
On operator’s end these pricing strategies could not cost them more than their dropping ARPUs. Customers are increasing, and so are average minutes per user per month, but revenues are standing still at what they were a year ago, or two for some operators. Situation gets worse when stagnant revenues are coupled with since ever devaluating Pakistan rupee.
Its not that regulators in other countries haven’t controlled the pricing of cellular segment, in fact we have recent examples of Uganda and Vietnam where government had to come in the way of promotion to ask mobile companies to not to decrease the price of telecom services beyond a certain point.
In case of Pakistan, PTA relies on SMP (Significant Market Player) rules to make sure that prices don’t drop enough, but we seldom see any action against Mobilink or PTCL (SMPs in their respective segments) when they introduce packages often dubbed as killer offers.
Call it sluggishness or a deliberate act by PTA to merely increase customers’ count, the whole situation has resulted into deteriorating stock values of cellular companies. This is why cellular companies are today reluctant to further invest in the market, be it for network expansion or the 3G, fact is that no one wants to invest a single penny before they get their original investments back in shape of revenues.
Remember the time when new value added services used to surface every other week, its not the case now. But new offers keep hitting the bill boards, probably because that’s the only way left to fetch new customers.
Industry experts have started to speak out that the time has come for PTA to sit with mobile operators, consult with them, to work on options, discuss them with industry veterans to devise a way to strengthen the industry.
Expect more damage in shape of new charges in coming days, if this doesn’t happen.
On a relevant note, if PTA must favor the customer, they can do so by pressing the government hard to reduce taxes. It may be recalled that telecom sector is most taxed amongst all in the country.