The Chief Executive Officers (CEOs) of the country’s top telecom companies on Thursday warned the government that the dream of Digital Pakistan may soon turn into a nightmare of a ‘digital catastrophe’.
In a series of separate tweets, Aamir Ibrahim, CEO of Jazz, Irfan Wahab Khan, Chief Executive Officer, Telenor Pakistan, and Hatem Bamatraf, President and Group CEO, PTCL & Ufone urged the government to disband the policy of pegging the license fees and interest on installments the US Dollar (USD).
Albeit in different words, all three CEOs said that the said policy has become detrimental to the financial health of the telecom companies and needs immediate reversal to power the country’s digital transformation.
In his tweet, Jazz CEO Aamir Ibrahim said that the devaluation of the Pakistani Rupee (PKR) has jeopardized the business case for telecom companies, as the license fees and interest on installments are pegged to the USD.
PKR devaluation has jeopardized the business case for telecom companies, as our license fees & interest on instalments are pegged to the US dollar. Last year 50% license renewal fee cost us PKR 44.5 billion, and this year, just 10% instalment alone costs over PKR 13 billion
— Aamir Hafeez Ibrahim (@aamir_ibrahim01) February 2, 2023
He mentioned that last year, 50 percent license renewal fee cost Jazz Rs. 44.5 billion, and this year, just 10 percent installment alone costs over Rs. 13 billion.
“Due to ongoing currency devaluation, we’re unable to determine the amount we’ve to pay in installment next year adding to uncertainty that no business plan can withstand. Sadly wrong policy of pegging telecom license price to $ pushing us from #DigitalEmergency to #DigitalCatastroph,” he added.
In a similar tweet, Telenor Pakistan CEO Irfan Wahab Khan said that while the telecom industry generates its revenue in PKR, spectrum auctions, renewal and installments are priced in USD exposing telecom companies to massive currency devaluation risk.
While telecom industry generates its revenue in PKR, spectrum auctions, renewal & instalments are priced in US$ exposing telcos to massive currency devaluation risk. Need to fix this mismatch before telcos capacity to further power digital transformation gets irrevocably depleted
— Irfan Wahab Khan (@irfanwahabkhan) February 2, 2023
He said that there is a need to fix this mismatch before the capacity of telecom companies to further power digital transformation gets irrevocably depleted.
Hatem Bamatraf, who is the President and Group CEO of PTCL & Ufone wrote on Twitter that with the constant devaluation of PKR against USD, the cost of doing business has significantly increased in the country. He said the expectation from telecom companies to invest heavily in infrastructure modernization while earning in PKR, is becoming detrimental to the dream of Digital Pakistan.
With constant devaluation of PKR against USD, the cost of doing business has significantly increased in the country. The expectation from Telcos to invest heavily in infrastructure modernization while earning in PKR, is becoming detrimental to the dream of Digital Pakistan.
— Hatem Bamatraf (@ceoptclgroup) February 2, 2023
“We must act now and devise a strategy for regulatory relief to avoid slowing down the digital development of the country,” he said.
Bamatraf added that the situation has made business planning impossible due to the uncertainty caused by the fluctuating exchange rate, rising interest rates, fuel and electricity tariffs. On top of that telecom industry remains heavily and unfairly taxed, he added.