In last few years monthly line rent has registered a
By SYED M. ASLAM
Jan-14 - 20, 2002
The disinvestment-bound Pakistan Telecommunication
Company Limited (PTCL) has once again announced to increase its monthly
line rental charge to aggravate an already unsatisfied customers. While
the PTCL has also announced to slash installation charges on new fixed
line telephones, on which it enjoys the absolute monopoly, the move is
aimed at ensuring an immense increase in its revenue at the cost of the
The manner in which the PTCL has chosen to announce
the increase is also extremely evasive. While it has announced to
increase the monthly line rent by just Rs 18 to Rs 300, it conveniently
remains silent whether it is, or not, inclusive of the 15 per cent
Central Excise Duty (CED). As is, the previous line rent of Rs 282 which
the PTCL has chosen to use as its base for announcing the 'small
increase' comprised Rs 245 in rental fee and Rs 36.75 in 15 per cent CED
the total of which was rounded off to Rs 282. The silence on the part of
the PTCL to clarify if the new line rental charge is inclusive of the
CED or not is seen by many as an indication that 15 per cent CED is not
part of the increase.
This means that the increase in monthly line rent
would cost the subscribers much more than the PTCL has made them
believe. It means that the subscribers have to digger much deeper in
their pockets to adjust the additional monthly billing which would not
be Rs 18 as announced by the PTCL but Rs 63 — the difference between
previous monthly line rent of all inclusive Rs 282 and Rs 345, 300 line
rent plus Rs 45 being 15 per cent CED.
The decision to increase the line rental for highly
inefficient services — such as incessant closures of telephones with
no recourse to subscribers, highly erratic wrong billing, noexistence of
directory services even at a cost, inaudible voice transmission, etc —
only months prior to PTCL's disinvestments shows that subscribers are
being milked for distinct reasons. Number one, it is aimed to earn top
price for the 20-26 per cent shares to the successful bidder. And number
two, to provide the successful buyer a pretext to keep charging the
subscribers high telephone charges even after PTCL's privatization.
Could there be a worse way to make the undermine one of the globally
accepted objective of the deregulation of the telecom industry — a
fair and free competition for the benefit of the subscribers.
It is easy to see that the PTCL has successfully
blocked any real competition even after its disinvestments by providing
the successful buyer the pretext to justify the high line rental fee.
The real looser of the expected high price for the disinvetment, the
Privatization Commission is expecting to collect between $ 700 million
to $ 900 million from the disinvestment of 20-26 per cent shares —
would be the subscribers in both short and the long terms.
Let us see the volume of additional revenue PTCL
would be able to make by milking an already milked subscribers — in
last few years monthly line rent has registered a six-fold increase, a
five-minute metering has been slapped on local calls. Number of
operational fixed lines increased by 250,000 to a total of 3.3 million
Let's calculate the additional revenue that the PTCL
would be able to make on the basis of both the imminent increases in the
monthly line rent — Rs 18 as announced by the PTCL and Rs 63 which it
has chosen to remain evasive about. An increase of the line rent by Rs
18 based on 3.3 million lines translates into an additional revenue of
Rs 59.4 million monthly or a cool Rs 712.8 million annually. On the
other hand, a Rs 63 increase in the monthly line rental means Rs 207.9
million a month or an even more cooler Rs 2.5 billion a year.
PTCL which is churning out record profit and revenue
year after year (for the year ended June 30, 2001 it earned a net profit
of Rs 18 billion and record revenue of Rs 62.04 billion) has once again
managed to ensure earning envious additional profit this year despite an
overall deterioration in all spheres of its work be it infrastructure
and highly inefficient staff and workers indifferent to the needs and
complaints of the subscribers.
Instead of milking the customers to better an already
record profits year after year, the PTCL should have given priority to
recover huge trade debts, both domestic and foreign, to prove that it
deserves the profit. According to PTCL's annual reports, the trade debts
increased by 40 per cent from Rs 22.5 billion in 1997-98 to Rs 31.39
billion in 1999-2000 of which Rs 13.3 billion were considered 'doubtful'
or in plain language unrecoverable.
The PTCL also announced recently of starting a
campaign to recover huge bills from the defaulters in the federal and
the provincial governments. Not surprisingly, the PTCL has been
conveniently sleeping over the years and has only woke up to recover
these dues which certainly could not had been accumulated over a night,
or a month or even years.