Telenor Finally Reacts to High Taxes, Tightening Regulations and Service Suspensions

telenor-logo-670-x-350Telenor yesterday decided to go hard on government against all the odds that telecom industry has been facing for past 2-3 years.

Telenor came up with an aggressive response when Lars Christian Luel, CEO, Telenor Pakistan, threatened Pakistani government to pull out of expected 3G auction by saying that company could find better places to invest as business case in Pakistan has weaken due to increased taxes, government-forced service suspensions and new regulations foe sale of new SIMs.

In an interview with The News and Express Tribune, Telenor CEO said that telecom companies aren’t money making machines and hence government will have to come up with rational policies to attract more investments. If not, then Telenor will pull out its investment – planned for 3G — from Pakistan to obtain better return on investment from other markets.

Lars said that taxes such as 19.5 percent FED and 15 percent WHT, are decreasing the value of 3G auction and the money that government can generate through sale of licenses because customers’ ability to spend on telecom services have reached the limits. He said that tightening regulations are further deteriorating the investment possibilities for Pakistan.

“If Pakistan is looking lesser attractive Telenor will invest somewhere else”, said Telenor CEO.

Lars, without clarifying on how to resolve the issue of un-registered SIMs, said that his company is put on back foot with court cases like the one which asks for a limit on number of SIMs on one CNIC.

It merits mentioning here that cellular companies never owned their role for selling fake SIMs during 2006-09, at a time when sale of un-registered SIMs was on rise. Subsequently, neither the government nor the telecom companies fixed those unregistered/illegal SIMs, instead all efforts were made just to streamline new sales, leaving behind the issue of old un-registered SIMs unresolved.

Talking about service shut downs, Telenor CEO said that cellular services remain the focus of government in curbing terrorism while overlooking all other elements. He said that its easier to buy a gun in Pakistan than SIM cards.

Telenor chief seemed utterly disturbed about imposition of 5 percent new tax on telecom services. He said that taxes in Pakistan were already three times higher than the neighbours like India. He was more furious on the fact that these taxes on telecom services are to be collected from poor people, while alleging that government has not properly taxed the rich class.

Banning night packages is an area in which the government should not interfere and its act is in violation of human rights”, said Lars.

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