Mobile Connectivity Of Millions of Users In Pakistan At Risk: GSMA

The GSMA today raised serious concerns over the unreasonable fees set by the government and Pakistan Telecommunication Authority (PTA) on operators renewing Mobile spectrum licenses in Pakistan, which it believes pose a significant risk to the mobile connectivity of millions of citizens.

On 25 May, the licenses of two of the country’s largest mobile operators – Jazz and Telenor – are set to expire. Under the current conditions operators are being asked to pay $450m to renew their licenses (more than double the dollar price at which operators originally acquired licenses at auction in 2004), or discontinue operations, which would mean disconnecting millions of customers.

A third operator, Zong is also due to renew its license this year.

The GSMA warns that the high fees proposed for renewing these licenses will slow the development of Pakistan’s digital economy and seriously affect operators’ ability to invest and support affordable services. The mobile industry association raised its concerns today in a letter to the PTA and Frequency Allocation Board (FAB).

“It’s consumers that will lose out from imposing unfair conditions that put operators’ businesses in jeopardy,” said Brett Tarnutzer, Head of Spectrum, GSMA. “We’ve already seen the damaging consequences that high spectrum prices have on coverage and quality of service in other countries. It’s important that Pakistan doesn’t repeat these mistakes, and place gaining inflated revenues from spectrum licenses above the connectivity of its citizens.”

Safeguarding mobile connectivity

Mobile technology is the primary means of communication for millions of Pakistanis, and enables the delivery of vital education, healthcare and financial services. Recent GSMA Intelligence research estimates the total economic impact of mobile to Pakistan’s GDP is $17 Billion (5.4% of total GDP).

To safeguard the continuity of mobile services for citizens the GSMA calls for the government in Pakistan to extend the deadline for agreeing license terms for all MNOs on a 3-month rolling basis at no cost, until it can reach a decision with operators.

High Spectrum Prices

The GSMA also calls for the high spectrum fees to be reconsidered. High fees make it difficult for operators to provide and expand affordable services and impact investment in network infrastructure that benefits the wider economy.

The government in Pakistan should not focus on short-term revenue maximisation through raising spectrum fees. The renewal price should take into account the current market and seek to enable the laudable policy vision and goals in the Digital Pakistan Policy, not further burden operators as they seek to connect the citizens of Pakistan.

Burdensome Taxes

In addition, operators already face many taxes and fees, which should be considered when setting further financial obligations on them. In 2017, the total direct tax and fee payments by the mobile sector were estimated at $950 million (29% of operator revenue).

The mobile sector makes a large contribution in taxes and fees relative to its economic footprint with around 12% of its revenue going to sector-specific tax and fee payments. Moreover, the wider mobile ecosystem contributes to the fiscal income of Pakistan, with a total of $1.9 billion in direct and indirect taxes in 2018.

“These high fees work against Government efforts to bridge the digital divide and build the digital economy,” added Tarnutzer. “Spectrum prices and taxes should be set at a sufficiently low level that allows operators to deliver affordable services and deploy mobile broadband widely. We are committed to engage in an open dialogue to help the Government achieve its policy objectives and facilitate sustainable investment in Pakistan’s digital future by all mobile operators.”

  • 450 Million Dollar = PKR 68,400,000,000 (2019) Rate 152
    450 Million Dollar = PKR 27,000,000,000 (2004) Rate 60
    Difference : PKR 41,400,000,000 (Huge Difference)

    Hope Licnese Renew Ho Jaye Warna Huawei Ka Dukh Pehly he hai telenor Ka Bhi Dkukh Bear Karna Hogi

    • Bro Mobile Operator Are earning in billions. But cannot pay License fee which is mandatory. And it was already into telco company notice that after 15 years they must have ro renew license. Of telenor and jazz are not wling to pay kick them and invite other telco into Pakistan

    • I mean seriously, you want to charge yourself based on the 2004 dollar rate, why ? Every operator revenue is increasing and they have earned a decent amount of profits for in the last 15 years.
      Saal baad to rent par lya gya ghar 10-15% increase ho jata ha and we are talking about millions of dollars here.

    • Why Installment ? telenor EasyCard 570 Se 760 Ho Gaya :
      Wo Kun Sa Hamae Installement Pe Dete hai
      450 Nahi Balk Billion Dollar Liya Jaye Otherwise New VODAPHONE IDEA AIRTEL KO Le Ao Yaha

  • I think govt is on right side in asking new rates from these telecom operaters

    • Just because Pakistan has lots of people in the government who think like you, Pakistan will never prosper and stay backwards forever.

  • The incumbent gov is leaving no corners in burdening the masses further. True that this beast was unleashed by previous corrupt governments, but what has the current gov done to safeguard its people against more corruption? We are willing to pick more weight if Pakistan can overcome this dilemma, but not at the expanse of corrupt getting NROs once again.

  • Cry me a river. Your yearly profit charts mean you’re making plenty of profit by exploiting and enjoying the lackluster law of the country.

    Poor services, scummy scammy practices, selling consumer data to further spammers, you name it. Go cry to someone who gives a shit. There are plenty of others to replace you and benefit from the opportunity. It’s a privilege.

  • Have anybody thought about the IPPs (Independent Power Producers) in Pakistan who are getting paid in dollars. In return the electricity is getting expensive day by day and they are getting huge huge margins. Does anybody think that rate with IPPs should also be re-negotiated in PKR ?|?|?

  • What the govt.should REALLY do is to ask why these companies haven’t brought down their prices even after the restoration of sales tax on balance recharge.

  • Government is also sending a message to foreign investors that it won’t honour contracts it signs with them. The contracted renewal price was the $290 mill figure so government is breaking the law by demanding more money. Net FDI has fallen by half this financial year because of this hostile environment: brecorder dot com/2019/05/22/498502/why-arent-foreign-investors-betting-on-pakistan/

  • Thanks Mr. Brett Tarnutzer Head Spectrum, GSMA. Pakistan played a major role in meeting the broader objectives of the ITU to change the dynamics of Pakistanis to telecommunications with the spectrum auction with a very low ARPU, the CPP regime, etc., as an icon in the world with initiatives to bring the country with four mobile licenses. Former Chairman PTA an iconic figure in the world to bring the country booming ICT revolutionised Pakistan’s telecom sector, with ICT sector, PASHA with collaboration from global bodies including Google, WEF, ICC and many more. The regulatory authority is doing the best of the best as member of ITU and the Telecom sector of Pakistan, with plans for further spectrum for surface transportation, etc., etc. The PTA contributed tremendously to the ITU, supported the GSMA Informa Telecoms. Please support the PTA as you always cooperate in the broader interest of furthering the upgradation towards 5G and beyond.

  • They charge consumers for network maintenance. They should pay from there. Corporate just dont want to lose the filthy money they are making from pak

  • The operators have already got total of 103 Bn Rupees of revenue increase in the last 10 months when Sales tax was removed. All this money went to their profits, this is like 1 bn USD. Government already lost this money due to Supreme court’s decision, now this money has to be recovered.
    So the price set is reasonable and this is for 15 years. The loss was within 10 months.

  • what are you people think, telco’s will pay renewal fees from their own pocket? Please growup. They all are here for doing business. At the end, We (customers) will pay for this heavy fees in terms of more expensive caling n internet packages

  • Isn’t it the same rate based on last auction….These companies take profits out in dollars and all int’l dealing in dollars, so why to compare price in RS…..IN dollar terms, they should pay 450M $….both these companies are enjoying the biggest share in market as well….

  • 15 saal se yeh nahi socha ke license renew bhi hona hai ……… kamanay mein lage huay sab …….. taxes mein bhi hera pheri …… aur masoon aisay banay huay hein ke jese 2004 ke baad 2019 nahi, 2005 aagaya ho
    haramkhor operators ………. cost cutting ke kutte

  • Biased Article, Telecom Companies are earning huge profits. There are un reasonable chaeges which consumers are paying. The more you use the more you pay in the name of Service and Maintenance charges. Government is moving in right direction

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