Off Net Calls Likely to Get Cheaper in Pakistan

The government has decided to slash Mobile Termination Rates (MTRs) from the current Rs 0.90/min to Rs 0.70, which would help telcos to keep off-net tariffs low for consumers.

MTRs play a critical role in driving retail tariffs, especially for off-net calls.

In view of the changing market structure of the cellular mobile segment and considering that the last change in MTR was made in 2010, a review of the existing MTR @ PKR 0.90/min was required in Pakistan.

Based on comments, hearing and meetings, the Authority decreased the MTR for all types of calls, that is local, long distance and international incoming calls terminated on mobile networks from other mobile networks or fixed networks from PKR 0.90 to PKR 0.80 on 01 January, 2019.

Pakistan Telecommunication Authority (PTA) official documents, available with ProPakistani, revealed that this rate will be further decreased to PKR 0.70 in 2020.

Subsequently, the MTR will be reviewed in the coming years in line with international best practices. It is expected that the revised MTR will help to keep tariffs low for consumers.

The documents further revealed that PTA carries out a regular exercise to verify and check whether Cellular Mobile Operators (CMOs) are charging their customers retail tariffs according to advertised rates.

Balance reloads; balance inquiries and helpline charges were also checked during the surveys. PTA conducted a billing verification survey in Karachi and Islamabad during the fiscal year 2018-19 and results showed that CMOs were charging as per advertised tariffs.

The Supreme Court of Pakistan had suspended sales tax, withholding tax and service charges in June 2018 on the pre-paid reload/recharge and usage. Cellular CMOs implemented the order of the Supreme Court in letter and spirit and stopped deducting taxes (GST / FED and WHT) and services charges from prepaid consumers. Resultantly, pre-paid subscribers got 100% balance (i.e. Rs. 100 upon recharge of Rs. 100).

However, the same taxes were restored by apex court on 24 June, 2019, resultantly, CMOs started levying taxes on their packages.

After restoration of taxes, it was observed that due to competition in the market, some CMOs reduced their mobile data tariff and did not pass on the impact of taxes to their consumers. CMOs also started incentivizing their subscribers by offering more on-net minutes, SMS and data bundles.