The package announced by the federal minister was also aimed to better compete with the cellular phone providers


Nov 17 - 23, 2003



The Pakistan Telecommunication Company Limited announced a six-and-half-billion rupee relief package to its consumers earlier this month. The salient features of the package, affective from the first of the next month, include reduction in the monthly line rent charges by one-third to Rs 200 inclusive of the general sales tax, reduction in connection fee by Rs 500 to Rs 1,350 in the urban areas and an affordable Rs 500 in the rural areas limited only to consumers who get the connections by June next year. The duration of the local calls metered for each 5 minutes is also increased from 5 minutes to 10 minutes during the off-peak hours of 10 am to 7 pm.

Observers say that the package, though welcomed by the relief and services starved consumers, is really a well worked out strategy by the PTCL aimed primary at expanding its customer base as obvious from the conditional relief offered in connection charges. It also aims to encourage the people to make more local calls during the off-peak hours to improve its revenue from the increased turnover. Observers also feel that the decision to double the time of the metered local calls during the off-peak hours was primarily aimed at lessening the growing pressure on the PTCL to altogether abolish, or at least reduce the charges of local calls, and metered ones at that, which are costing the consumers an arm and a leg.

In recent years a strong case has been made by the PTCL's customers that the sole fixed-line telephone provider should provide similar services to them as offered by its counterparts in all of the developed and many of the developing countries. It is also competently argued that since fixed-line operators in many parts of the world offer unlimited local call facilities to their customers at affordable fixed monthly charges the same services should be provided to its subscribers by the PTCL which has seen to charge them for every single local call and that too a metred one.



Observers also feel that the package announced by the Federal Minister of Information Technology Awais Ahmed Leghari was also aimed to better compete with the cellular phone providers which have registered tremendous increase due primarily to reduction in their connection charges as an alternate service to the fixed phone service. According to the minister, the PTCL would annually lose Rs 5.5 billion revenue in monthly line rent alone and another Rs 1.5 billion in connection charges.

However, the fact remains that PTCL has once again remained conveniently silent about the most persistent, and loud, demand made by its subscribers time and again providing relief in local calls. Instead, it has satisfied itself only by providing token package which offers no relief from the menace of multi-metering of local calls, an unthinkable practice in most of the developed and much of developing world. The latest reduction in the charges of local calls also turns out to be insignificant a meagre 50 paisas per minute in prime time rates only not available during evening and night time.

The behemoth public sector organisation with a total 4.3 million lines as at June 30 this year can certainly afford to offer real relief to its subscribers which just don't have any other choice to switch their involuntary loyalty elsewhere. Instead of doubling the duration of metered local calls from 5 to 10 minutes during 10 am to 7 pm it would be more appropriate to slash the subsequent duration by half and would have also helped earn PTCL some respect from the subscribers who are forced to absorb the PTCL's multi-metering decision.

Certainly, the PTCL can afford to offer its customers meaningful relief because unlike the most public sector organisations, it is continuously bettering its profit every year that comes out from the pockets of its choice-less customers. If the loss-churnings organisations as the Water and Power Development Authority and the Karachi Electric Supply Corporation can be allowed to charge high tariffs on the pretext of running in red the PTCL which is making record profits year after year should be asked to abolish, or at least reduce, its local call rates or at least forego the multi-metering practices.

It may be realised that the forced loyalty would deprive the PTCL of any goodwill of the subscribers which would cost it dearly if and when they would have a choice. The PTCL would be better off with a strategy that seeks to increase its revenue from increased turnover and provision of value-added services instead of resorting to such abominable practice as multi-metering and that too of local calls which are offered free of charges elsewhere.

As is, PTCL's overall revenues depicted a 7 per cent increase from Rs 62.04 billion in 2000-2001 to Rs 66.43 billion in 2002-03. The operating profit also increased from Rs 30.6 billion to Rs 32 billion while pre-tax profit increased from Rs 29 billion to Rs 31 billion during the same period. The after-tax profit also increased from Rs 18 billion to Rs 20 billion during the same period.

With such fabulous profits the PTCL can certainly afford to offer real relief to its customers to earn the voluntary loyalty. It is time the PTCL should break its silence to slash or altogether abolish charges on local calls and abolishing the multi-metering would be a good beginning towards that goal.