Tech and Telecom

Economic Meltdown Forces Telcos to Cut Costs

The current economic meltdown and related liquidity issues have forced telecom companies to opt for cost cuttings, with one major player reportedly looking for a suitable buyer to take over the reins.

Additional Secretary Ministry of Information Technology and Telecommunication Aisha Humera said that due to high expenditures and low profit, Telenor is thinking of leaving Pakistan.

MNA Aliyah Kamran said that if Telenor is leaving the country, then there would be some other issues other than low-profit margins. Interestingly, the committee was informed that Telecom Average Revenue Per User (ARPU) is the lowest in Pakistan. Further, due to the State Bank of Pakistan’s (SBP) restrictions on the opening of Letters of Credit (LCs), imports were being delayed, resulting in hampering project implementations.

Contrary to the remarks made by the Additional Secretary IT during the session of the NA panel on IT & Telecom today, the Spokesperson MoITT said the entire story was being reported out of context.

He told ProPakistani, “Telenor’s position on leaving the country is being misrepresented. The Additional Secretary’s point was that the closure of LCs was causing problems for the companies, and nothing more “.

Telenor spokesperson told ProPakistani, “We would like to categorically state that this is not true. Telenor Pakistan is committed to serving its customers and connecting them to what matters most.”

On the subject, Member Telecom of IT and Telecom Ministry Umer Malik admitted the poor quality of services while saying that quality of services parameters are not at par with other regional countries.

He said that around 1.5 million internet connections are being added every month, but operators failed to meet the requirements and have not upgraded their capacity. He said that the telecom sector revenue was Rs. 654 billion in 2020-21 which reached Rs. 691 billion in 2021-22. Despite the bad economic conditions, new companies are coming into the telecom sector

The committee observed that even in Karachi, Hyderabad, and Islamabad, consumers were unable to get access to proper 4G services. Malik said that around 5,000 towers were affected due to recent floods in the country. “It looks like the internet is powered by microwave signals. When machinery isn’t imported, how can we get quality internet?” a committee member argued.

Participants noted that the overall quality of mobile and internet service across the country is very poor. There are service problems in major cities including Karachi, while internet services are not available on motorways during travel, and around 148 towers in Balochistan have been shut down for security reasons. On the technical front, there are problems concerning security, the opening of LCs, and low profit, and steps must be taken to move the sector toward sustainability.

Published by
Ahsan Gardezi