Though the process was slow compared to the rest of
the world, yet the telecommunication sector has finally arrived at a
point where telephone, either landline or cellular has become
Growth of the telecommunication sector is reflected
in the recent declaration of the cellular sector as an industry and that
benefits will start coming in from investment point of view enlarging
scope of coordination between various relevant sectors including
Information Technology in Pakistan.
Resultantly, an era of competitiveness in telecom
sector has started taking roots in various segments of the economy as
well as social life of the society. PTCL has adopted numerous measures
to keep consumers satisfied and attached with the Company. To retain the
corporate customers in the competitive scenario to be emerged after
deregulation of the telecom sector, PTCL has focused its marketing and
customer care areas. To facilitate corporate consumers who contribute
about 70% revenues, PTCL has setup special corporate customer centers in
Islamabad, Lahore and Karachi. In order to provide improved
infrastructure to the customers, PTCL has initiated a project of optical
fiber access (broad-band access). Another project being started by PTCL
is billing and customer care to facilitate the total five million
customers, adding the residential customers who are 75 per cent of total
customers and contribute 30 per cent of revenues, will largely benefit
from the project. Under this project, 2800 exchanges of PTCL throughout
the country would be inter-linked so as to get on-line information.
It is the growing competition in this sector that the
PTCL was forced to reduce its installation charges to the level of Rs500
initially for the rural areas but this would naturally be applicable for
the urban centers where the demand for new landline telephone connection
was gradually declining due to availability of mobile phone option at
much easier terms.
Currently, the call charges studded with government
levies are on the higher side. Actually, utility services means
facilitation services for the people but unfortunately these utility
services are being used as tax collecting agencies in Pakistan. Out of
140 million of population there are 5 million subscribers in Pakistan
which speaks about tremendous potential for growth in Pakistan.
The government in principle has agreed to reduce call
charges and its official announcement would be made in the forthcoming
federal budget in June this year. Earlier, the PTCL had introduced a
scheme of fixed charges of Rs500 a month for local calls. This was a
wonderful scheme, restoration of that scheme and low installation rate
would mean a multiplication of subscribers from existing 5 million to
expected 10 million in a short span of time, if the golden principle of
low profit and large volume is adopted in this sector.
The government has recently announced a new policy
for cellular phone which declares it as an industry.
Following are the expected benefits of the new
•Additional investment of over $1.5 billion in
mobile cellular sector. Additional job creation of 12000-15000 both
direct and indirect.
•Coverage to about 300 cities and towns including
over 70 percent tehsil headquarters. Coverage to over 50 percent
population presently 30 percent of the population has the access to
•Consumer base of about 15 million (3 million
•Tax revenues increase from Rs3.4 billion to Rs16.9
billion including GST, import duties add corporate tax but excluding
•Mobile Tele-density to increase from 2 percent to
about 10 percent.
In short, this progressive policy is designed to give
boost to the sector and also keeping in mind the future technological
developments in the field of mobile cellular communications.
The minister for IT telecommunications, Awais Ahmed
Leghari, expressed the hope that policy would attract new investment
worth $1.5 billion in the next three-four years and provide between
12000 and 15000 additional jobs.
At present, four mobile phone companies are operating
in Pakistan. Most of the operating companies making new investment to
expand their coverage. These have the option to adopt the new policy,
which allows a number of new incentives.
The new policy, which allows only two new companies
in the sector, will be selected through integrated bidding for phone as
well as frequency spectrum. The agreement is likely to take place in
The objective is to enhance coverage area of
telephone facilities in far off corners of the country. For this
purpose, it would be obligatory on the new companies to have their
operations in 70 percent of tehsil headquarters in the next four years
and at least ten percent in tehsils of each province.
The companies will have to give a performance bond of
Rs30 million to ensure their compliance with rollout obligations. They
will also have to contribute to R&D fund.
The policy becomes operative with immediate effect,
however a bill amending the Telecommunication Act will be presented in
the Parliament in near future.
The opening of the sector would enhance coverage and
provide competitive rates and quality service to the consumers because
of the growing competition. The policy also allows the companies direct
accessibility to their consumers within own region. This means they will
not have to go through PTCL channel.