Defense Housing Authority Karachi, also known as DHA, has started charging Internet Service Providers a whopping 17.5% of their revenues every month under the account of Right of Way fee.
DHA says that they need to maintain roads and civil works and hence, charging the fee was necessary.
ISPs, on other hand, are in a state of shock and insist that absorbing the increased fee would be impossible on their ends. Naturally, they will have no option but to pass on the fee to customers – so if you live in DHA, expect to pay 17.5% more money for internet going forwards.
“We used to cover RoW fee and never passed it on to customers in past, but this newly introduced fee is a new form of tax that’s charged every month based on our revenues”, we were told by an official of an ISP in Karachi.
The situation is unique because for the first time ever, DHA has decided to charge ISPs based on their revenues. However, DHA can’t determine the billing and revenues of an ISP unless the data is shared with them. And this is something ISPs aren’t willing to do since it falls under trade secrets and will also expose customer data to a third party.
“It is not only about the recurring price hike, but DHA is also asking us to share billing details of customers as it wants to charge us based on our revenues”, the official told us, adding that it would be impossible for the company to do so since it’s blatant violation of customers’ privacy.
But unless ISPs submit to DHA’s demand, they can’t offer internet services to customers living in the gated community.
Not to mention, ISPs had already paid the RoW fee to CBC (Cantonment Board Clifton) for laying cable in DHA Phase 1 to 7. Despite CBC’s payment, DHA is now asking ISPs to pay the fee on a recurring basis, which is far from industry standards.
Role of PTA and MoIT
Despite clear instructions in Telecom Policy 2015, PTA is yet to devise a mechanism and framework for resolving Right of Way issues for telecom companies.
We know for a fact that telecom operators are unable to provide services in certain areas in urban centers – particularly in Karachi – just because they are not allowed to lay cables in private societies and communities.
PTA has also been urged by ISPs to rationalize the price structure for RoW in a manner that is fair financially for companies.
Not to mention, ISPs have not revised tariffs despite a 20% increase in bandwidth costs due to rupee depreciation. However, it’s not possible that these new levies would be absorbed by ISPs in a very competitive priced broadband sector.
A leading FTTH’s vehicles and fiber equipment operating in DHA areas have also been seized thus affecting customer operations.