PTA’s Directive to ISPs to Launch Rs. 600 Internet Package Backfires

A Pakistan Telecommunication Authority (PTA) directive to fixed line operators asking them to launch cheap internet packages during the COVID-19 pandemic has backfired.

PTA had asked these operators to launch a special package for people who are working from home as well as students taking classes online. The package details included 2 Mbps speeds and a monthly limit of 40 GB at a price of less than Rs. 600 per month.

The letter sent to operators said that the coronavirus outbreak demands special packages from ISPs as the lock-down had forced the masses to work from home and students to take online classes.

“In this time of crisis, every segment of society is contributing to help the nation”, said the PTA letter.

PTA asked ISPs to submit compliance report by April 7th, 2020.

The ISPs, through ISPAK — a body that comprises of internet service providers —  have termed the directive “irrational” and instead pointed out PTA’s inaction over several key matters:

• No action taken for abolishing minimum 8% tax, exemption from 12.5% federal advance income tax and 19.5% provincial service tax on Internet.
• No action taken in reducing import and regulatory duties and taxes on telecom hardware.
• No action taken, which is required from PTA under Telecom Act, when owners of ROW use strong-arm tactics against operators and extort money, despite having valid ROW permits and agreements.
• No action taken on implementing a national policy of uniformed cost-based right of way (ROW) charges.
• No action taken, which is required from PTA under Telecom Act, when FTTH networks of FLOs are willfully damaged and sabotaged by miscreants. Operators are forced to deploy their own security and vigilance staff thus increasing difficulty and cost of doing business.

ISPs, through a letter written by ISPAK to PTA, said that as normal broadband packages are currently around 10Mbps speeds, lowering them to 2 Mbps would not be viable for anyone.

They further said that it would be nightmare for FLOs to identify students and those working from home.

“Every home has a student. This means all home customers will shift to this package. With corporate revenues already dried up, PTA wants to make sure that all fixed-line operators die economically and lay off their employees.”

ISPs further urged PTA to take the following steps under the head of COVID-19 relief efforts if they really want to help the industry and aid the economy:

• Abolish PTA regulatory fee (0.5% of revenues) for one year.
• Abolish USF (1.5%) and Ignite (0.5%) contributions for one year. The government has previously collected billions from telcos for USF and Ignite contributions and utilization of these funds have been very low. These funds were diverted to Federal Consolidated Fund and used elsewhere in violation of the Telecom Act.
• Abolish 12.5% advance income tax and 19.5% provincial sales tax thus giving 32% direct relief to Internet users.
• Abolish right of way fees across Pakistan for one year.
• Reduce cost of wholesale Internet bandwidth of upstream providers from current $2.5/Mbits/month to $0.5/Mbis/month (as per international prices) and delink it with USD so that internet users can get 50-100 Mbps speed broadband at affordable price.

“We sincerely hope that PTA will contribute to help the nation, internet users and its licensees in these testing times”, concluded the reply from ISPs.

Update

A PTA spokesperson, while commenting on above story, said that PTA had written letters to licensed fixed line operators to launch pro-consumer offers in the wake of COVID-19.

He said that above retaliatory comments are from ISPAK, and not from fixed line operators.

He said that PTA issued such directives strictly as per rules and that licensed fixed line operators are legally bound to respond to PTA by complying to authority’s instructions.