The Telecom sector has warned the State Bank of Pakistan (SBP) about the unavailability of the required telecom equipment and SIM cards, which could lead to a digital emergency in the country if imports are not allowed to the operators on an immediate basis.
Sources in the telecom sector said that the network upgradation of telecom operators has come to halt at a critical point across the country, including in flood-affected areas due to the restriction of the banking regulator, which imposed a ban on imports of telecom equipment and SIMs cards.
The stock of SIM cards has been exhausted at various franchises, while the scheduled maintenance and upgradation have been delayed due to the unavailability of the required apparatus in the country, they said.
In this regard, telecom operators have approached the State Bank of Pakistan (SBP) via letter, explaining to the regulator the gravity of the situation in the telecom industry and its serious consequences across the country as a result of the required quality of services and interruption in connectivity and communications.
The operators clarified that operators have converted most of the imports on CNY (Chinese Yuan) with most of the Letters of Credit (LCs) booked on deferred terms, hence the imports of the operators have neutral impacts on the Dollar account, according to the letter written by the telecom operator to the SBP.
The operators suggested that SBP may allow the authorized dealers to proceed with the deferred payment LCs beyond 91 days without any prior approval from SBP to control the foreign exchange (FX) outflow on an immediate basis in the requirement of the current scenario.
Moreover, the authorized dealers may please be advised to accommodate the forward booking requests in Chinese Yuan against deferred payment LCs, the letter further reads.
Currently, there are hundreds of such business cases submitted with SBP for approval, which if delayed any further would lead to a Digital Emergency in the country, since the non-availability of below equipment will hinder the provision and maintenance of telecom infrastructure, hence connectivity nationwide.
Telecom’s Performance for Quality of Service
It is further reiterated that telecom equipment is not a luxury item and is not manufactured locally, therefore telecom companies (Telcos) do not have any option other than to import all such equipment for their network up-gradation and expansion as well as to maintain the quality of service requirements mandated on us through the licenses given by PTA, the letter added.
Moreover, connectivity is the key to the relief efforts underway for the flood-affected people across Pakistan by the respective Governments and the public, which won’t be possible for Telcos to ensure if they don’t have the requisite supply chain of the telecom equipment to maintain their network infrastructure. Such rigorous compliance and approval process not only adversely impacts the telecom industry but also defies the ‘Ease of doing Business’ goal of the government, creating a hurdle for the Digital Pakistan agenda.
The operator requested the SBP to provide approval of the critical infrastructure-related import cases to banks on a priority basis to avoid network closure and facilitate their modernization/expansions.
It is pertinent to mention that over 3,000 telecom sites were affected in the flood-affected areas and most of the affectees lost their mobile handsets during the floods. In this scenario, the demand for telecom apparatus/ equipment and SIM Cards have gone up.
SBP’s Stance
Sources in the SBP stated that the banking regulator is maintaining a priority list of imported items due to the serious situation of foreign exchange reserves and the current account deficit due to the higher import bill.
The imports will be relaxed in phases to be normal as the situation of foreign exchange reserves is improving gradually.
