An interview with Chairman PTA
From SHAMIM AHMED
Mar 25 - 31, 2002
Pakistan Telecommunication Industry which is
presently in a process of transition — moving away from regulated
state-owned monopoly to a deregulated competitive structure — is
poised to have a phenomenal growth during the first decade of the
(2001-2010) 21st century.
This was stated by the Chairman Pakistan
Telecommunication Authority (PTA), Maj. Gen. Shehzad Ahmad Malik while
talking to this correspondent in his office in Islamabad last week.
Replying to a question in an exclusive interview to PAGE General
Malik said, PTCL's monopoly is going to be over by the end of 2002.
Telecommunication sector would be deregulated
completely including voice after expiry of PTCL exclusivity by the end
of this year. This will create an environment of competition in telecom
industry. PTA has geared up its all resources to face the challenges of
post monopoly era and will play a role where fair competition can be
prevailed and opportunities for investment in the sector may be
provided. The public investment opportunities will be as follows:
The foreign investment has been fully protected and
will surely enjoy a high return. Telecommunication market has an ability
to offer a high growth potential for a population of over 140 million
people and current teledensity of only 2.5 per cent i.e. only 4 million
lines. PTA plans to uplift the teledensity to 7 per cent i.e. about 10
million lines by 2010. Therefore about one million additional lines will
be installed every year. The opportunities of Telecom market are to
emerge as the regional hub in South Asia, he added.
Following are the questions asked by PAGE and
their answers given by PTA Chairman.
Q. Why PTA was created and what specific functions
and responsibilities have been entrusted to it? How far it has been able
to meet its target so far?
Ans: At the advent of twenty-first century, the
global telecommunication industry is being reshaped by fundamental
changes in ownership, market structure, regulatory practices and
technological advancement. Transitional periods of market exclusivity
are ending in some countries, and competition is being introduced at a
quick pace in the formerly insulated market segments. The industry is
becoming large and more diversified.
Until recently telecommunication (telecom) has been
provided in most countries as user-pay public services administered by
the government — typically through Post, Telegraph and Telephone (PTT)
ministries — or by the government regulation of private monopoly
Telecom reforms are underway in all countries and at
the regional and international levels. This reform is characterized by
new laws and policies, and the establishment (or reorganization) of
telecom regulatory agencies to implement them in a new dynamic
international market environment. The success of telecom reform will
depend heavily upon the establishment and maintenance of effective
regulation, which must encompass a wide range of expertise and be
informed, forward looking and adaptive in helping to shape the
information infrastructure that will provide the foundation for 21st
century information societies.
The Pakistan Telecommunication Authority was
established under the Pakistan Telecommunication (Re-organization) Act,
1996. It consists of a Chairman and two members, Member (Technical) and
Member (Finance). The PTA's functions include:
a) Regulating the operation and maintenance of
telecommunication systems in Pakistan.
b) Protecting interests of the consumers.
c) Ensuring transparency and non-discrimination
in telecommunication licensing.
d) Managing radio frequency spectrum resource.
e) Promoting universal service obligation to make
basic telecom service accessible to all.
f) Encouraging introduction of modern
terrestrial, cellular and satellite services in the country.
g) Supporting modernization of telecommunication
systems through liberalization, de-regulation and privatization.
h) Creating a rationalized tariff structure for
the telecommunication industry.
i) Investigating into complaints against the
licensees for alleged violations of the Act.
j) Protecting and representing Pakistan's
telecommunications interests at international forums.
PTA is fulfilling its responsibilities in accordance
with Pakistan Telecom Re-organization Act, 1996 and issued 2754 licenses
upto 14th February 2002 so far. PTA is playing a vital role to promote
the industry. Recently it has reduced royalty of Card Payphone Services
and ISPs from 4 per cent to 1.5 per cent and 0.66 percent respectively.
This was being demanded by service providers since long time.
Q. What plan of action you have in mind to meet your
enhanced responsibilities as a regulator, especially to protect the
Ans: Section 6(d) of the Act, 1996 requires the
Authority to ensure that the persons affected by its decisions get a
fair chance of being heard. Hence it was incumbent upon the authority to
adopt ways and means to consult users of the services and keep them
informed on the proposed changes in the tariffs and charges.
The authority instituted a system of advisory
committees on which eminent citizens and learned men from all walks of
life. The Authority also consulted with these advisory committees on
issues of public interest.
Public hearing and web hosting were important steps
in the consultation process. PTCL tariff proposal submitted in July 2000
was placed before the Central Advisory Committee for consultation on
14th July 2000. PTCL presented the proposal to the committee and
extensive discussions were held. The members offered valuable
suggestions, which helped the Authority to conclude and arrive at a fair
and more informed decision. The Authority also held a public hearing on
15th July 2000 to discuss the proposal with important consumer interest
groups. A large number of eminent citizens, academicians,
representatives of Chamber of Commerce & Industry, Stock Exchanges,
Consumers Right Commission and Citizens Committees etc participated in
the hearing and offered suggestions on the issue.
PTA consulted the consumers on other important issues
before taking decision. For example, it heard the views of the general
public in three public forums held in Islamabad, Karachi and Lahore
regarding the complaints of the people on card payphone industry. Same
was its procedure while deciding on CPP and cable TV tariff.
One of the key objective of the Pakistan
Telecommunication Authority was to create an informed community by
providing them regular information about matters relating to the
telecommunication industry. PTA is responsible under Section (18) of the
Telecommunication Act, 1996 to submit a yearly report at the end of each
financial year on the conduct of its affairs including action taken for
protection of consumer's interests. It was again in this backdrop that
PTA published its Annual Report to provide information about the
performance of different telecommunication services, consumer benefits
and the quality of service. PTA lurings out Telecom Status Report every
year which presents a broad overview of telecom industry and services in
Pakistan as well as global market.
PTA has also developed a website to inform the
consumers about the activities of the PTA. The site provides necessary
information about the operational nature, new standards, and issues
regarding consumer satisfaction and consumer benefits.
The electronic media was also part and parcel of PTA
in its efforts to inform the public about new challenges of the
information revolution. The campaign proved effective in raising
awareness about consumer's rights and duties and encouraged the
Authority to increasingly focus on their needs.
PTA's role has strengthened with the passage of time
and it is aware of technological and market trends. It is focusing on
competition and a proper role in public private partnership in
infrastructure for investment promotion. Recently PTA has taken very
bold and investment friendly decisions in order to promote telecom
industry in the country. Annual renewal fee and revenue sharing fee for
ISP's and Card Payphone has been drastically reduced from 4 per cent to
.66 per cent and 1.5 per cent respectively.
For the first time in PTA's history the PTCL tariff
enhancement proposal was not accepted in the interest of Public.
PTA has created a complaint cell at its headquarters
to handle the complaints received from various corners of the public
against any telecom service providers. The complaints can be send on
line, by fax, by telephone and by post. These complaints are resolved
expeditiously and action taken on them is intimated concerned
Q. The introduction of satellite phone technology is
something new in Pakistan. What are its future prospects, and what
significant change do you think the new technology will make in the
existing infrastructure of the telecommunication sector?
Ans: The satellite phone technology is a
satellite-based mobile communications system providing services to user
terminals deployed anywhere in the world service area. The system
represents a major advance in communications technology wherein mobile
satellite communications capability will be integrated with the public
land mobile networks (PLMNs) for the first time. Satellite phone will
provide the interface with the public switched telephone networks (PSTNs)
and PLMNs allowing users to call anyone anywhere in the world.
The system will offer users personal mobile satellite
communications including digital voice, alerting and paging services as
well as facsimile and data transmission.
The satellite phone user terminal will be a dual-mode
satellite cellular terminal, which will be able to select either
satellite or GSM cellular modes of operation automatically or under user
control. The satellite service offered will be line-of-sight with a
voice quality similar to digital cellular systems.
Focusing on the needs of the Pakistan market,
satellite phone will be more suitable than the planned global persona
communication systems. Because of its coverage services specifically
within the region and remote areas in Pakistan, the satellite Phone
System will provide more affordable communications than the competing
global systems as circuit capacity will not be wasted on ocean or polar
coverage. Despite the rationality of the system satellite phone
subscribers travelling outside the coverage will be able to roam using
the GSM networks worldwide.
A major feature of the satellite phone system design
is the integration of a satellite system with the PLMNs to provide
mobile communications service. Satellite phone designed to be a
satellite-based version of the Global System for Mobile (GSM)
terrestrial cellular standard and will use GSM procedures in its
The satellite telephone service is especially helpful
in remote areas where no other telecommunication services are available.
Satellite telephone permission issues to those firm which have agreement
with Government of Pakistan and are engaged in drilling activities for
producing petroleum, gas and other natural resources within Pakistan in
far flung areas.
Q. Are you satisfied with the quality of services and
its cost to the consumers?
Ans: Internet business in Pakistan was started in
the private sector and it has blown into a fully competitive business
with more than 100 Internet service providers in the market. Since
Internet service is a fully competitive business, market forces decide
the cost which is commensurate with quality of service. There are
service providers who are selling Internet connectivity at as low a rate
as Rs.5/- per hour and there are others who are providing service at a
rate high as Rs.30/- per hour and to top it all there are no activation
charges for most of the service providers. Naturally the quality of
service provided by the vendor at Rs. 5/- per hour cannot be compared
with the quality of service, which costs Rs. 30/- per hour. Customer has
a choice to select the service provider according to his budget. PTA has
further facilitated the business by lowering the royalty from 4% of the
gross revenue to 0.66% of the gross revenue. It is hoped that this
facilitation will help Internet service providers to improve quality of
service and lower the rate further to facilitate the customers.
PTA has published major service quality indicators
for almost all the Internet Service Providers, in the National press, to
facilitate the customer to make an informed choice of his service
Q. While PTCL is reducing its charges, the cellular
connections are getting expensive. Why? What action you have taken or
propose to take to check this trend?
Ans: 1. Regarding connection charges of cellular
mobile service, it is pointed out that at present:
* Mobilink is charging up to Rs.750/- as
connection charges for their postpaid package.
* Currently Mobilink and PTML are not selling
prepaid connection. However, previously Mobilink was charging Rs.500 to
2500 as connection and cost of SIM Card for its prepaid package.
* U-Fone is not charging any connection fee.
* Paktel and Instaphone are not charging any
2. I feel, it would not be appropriate to compare
cellular mobile and fixed line service. These are two distinct services,
hence may have different tariff structures as tariff levels. Moreover,
the cellular mobile is a competitive service, for which lean regulation
would be more suitable.