Time for PTA to Lock Cellular Tariffs

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.

Tech and telecom reporter for over 15 years

  • Good point.
    I think its time for PTA to step-in and take some measures to stop further stagnation of the industry

  • Best option would be to put per minute(lets say 5 or 6 paisa) tax on every outgoing minute and sms and to bring down overall tax equal to other products that is 16%(which is 29.5% now). In this way those who will use more will pay more.quality will automatically improved

  • Try and explain this to the common subscriber Aamir :) all you will hear are rants about everything being expesive and the need for everything to be free….

  • Time for the PTA to lock itself in a dungeon and never come out.

    Far from regulating the Pakistan Telecommunications industry, this government body is causing us national shame through senseless and idiotic sms blocking lists.

    I cannot tell you how many people here in the UK have made fun of Pakistan and PTA.

    Please PTA better not issue any more thoughtless statements and save us from additional shame. We already have it quite bad and don’t need a government department exposing how intellectually backward we are. Thank you.

  • Thank God…,finally this has been realized. but the damage has already been done to the industry at large, we are too late to think in this context.

  • come on amir, PTA should make sure that standards for quality and customer services are maintained …. if an operator keeps those standards and drop its price then what is wrong with that?

    • yep that’s the exact job of the authority. locking/Increasing the rates without any improved quality will never benefit the consumers in any way specially when your authority is not interested in forcing the companies to maintain the service standards.

    • Protection of employees of telecom companies is also a responsibility of PTA because they are also citizens of Pakistan…
      Also this much unjust competition is affecting investment in Pakistan & investors don’t want to put their money on stake due to very little profit

  • Firstly, the operators need to get rid of their bundled sms and night packages, which will decrease the load on their networks.

  • I’m always thinking why in pakistan it is too much cheap to make calls and sms packages as in other countries its not as much cheap as in Pakistan.

  • Well, PTA should freeze tariffs at this stage when every company is offering lowest rates to attract customers but its all in all affects network quality! =(
    PTA should consider about network quality issues!

  • Call rates should not be decreased. Our young generation is suffering from bad habits. calling girlfriends. oh God :( i left all of my gfs

  • In long run, dropped prices have not been befitted by any one, customer, operators or vendors. We as vendors to telecos have long payment cycle casuing great financial burden, if we are lucky and teleco is able to release the payment. Otherwise we have huge payments due for more than 3 years as well, just because telecos have to make huge amount partal payments to PTA as license fee. Not fare to industry in specific. Government should be neutral and favour the industry to flourish not squeeze money out of ’em.

  • @Londonkaybadshah Tumhain sharam aati hai that they have taken a initiative to stop vulgarity on the mobile. Try looking up on twitter, there are now people offering that you subscribe to them and they send you dirty jokes & other vulgarity.. non stop via SMS. Do you think that’s intellectual?

  • PTA fixing prices is an unethical act.

    They block ports that other countries dont, they fix prices that other countries dont, and they do not give protection to consumers that other countries do. PTA is sucking 19.5 percent of blood from our bodies in shape of Fed Excise for no good reason at all.

    If some one offers less price does not mean that the quality is lowered. Instead PTA should do its prime role of regulation that they never do.

    Anyways just to make PUblic, I have applied to FIA to register an anti-corruption case against PTA as they denied to take action against a telecomm operator for a serious telecomm blunder but the PTA has given its *** to FIA to delay the proceeding.

    Yes its me you PTA m****s.
    And this is the whole truth.

  • I could not agree more with this article. It is indeed very true that the cellular companies compromise on quality in order to cut costs to compete in the cut throat market, and i have experienced this personalty. i keep switching from network to network, but all networks provide a horrendous service. Its just simply appalling, the way things are done in our country, and i also agree with the writer that there is a lot of innovation in cellular network services in other countries, and we do not have to look very far, India is a prime example. it is time we learn from the enemy! Also, the writer is quite right in saying that the government should reduce taxes for the telecom sector. i would recommend cutting the defence budget. The Army usurps everything, for doing absolutely nothing. its another very sad reality of our country. A great article, thanks for sharing!

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