Stopgap measures hurt the telecom sector in Pakistan


Stopgap measures hurt the telecom sector in Pakistan, while some controversies on the International Clearing House (ICH) and suspension of 3G auctioning due to violation of procedures reverberated throughout the last year.

However, the successfully launch of biometric verification system to counter the unregistered sales of SIMs, used in terrorism and criminal activities, was the most remarkable achievement.

The ICH was launched to curb grey cellular traffic, but actually legal traffic reduced nearly 30 percent.

The Federal Communications Commission, Washington DC had also blocked the settlement payments to Pakistani Long Distance International carriers by the US LDI due to anticompetitive behavior adopted by the Pakistani regulator after the implementation of the ICH. The Competition Commission of Pakistan had also declared the establishment of the ICH anticompetitive and issued orders against it as well.

The issue of right of way (ROW) for the installation of base transceiver station (BTS) towers in cantonment areas across Pakistan has also remained unresolved during 2013. This issue marred the quality of services in the cantonment areas. Almost every subscriber of different cellular mobile operators (CMOs) underwent sudden signal outage, call drop and distortion in calls. Basically, due to conflict on fee and charges with the cantonment authorities, the installation plans of BTS towers have not been executed as yet.

The Competition Commission of Pakistan came hard on the deceptive marketing practices of the CMOs and the CCP issued show cause notices to them for alleged violation of the Section 10 of the Competition Act, 2010.

In December 2013, Wateen Telecom and Qubee announced their plan to combine their wireless broadband businesses in the country.

This shows that the wireless broadband market has more than the necessary players and thus, they are unable to recover their cost and expand their businesses. This also heightens the need of more comprehensive and market-based policy for the growth of this segment.

Moreover, increase in five percent withholding tax on telecom sector in the federal budget 2013-14 hampered the growth of and foreign direct investment in the sector. The stakeholders raised hue and cry over the tax, but to no avail.

An official at a cellular company said new taxes in the budget weakened the consumer’s buying power as well as revenues of the operators.

He termed positive the appointment of minister of state in the ministry of information technology and consultants for 3G and telecom policy review and filling of vacancies in the PTA.

He said the introduction and implementation of biometric verification system was historic. Besides, there was a considerable decrease in the network suspension during some important events. He appealed the government to consider the removal and rationalisation of taxes on telecommunication services and expedite the auctioning of 3G to make these services affordable for consumers.

He hoped that the New Year would stabilise regulatory environment to enable the companies to better serve customers. There is yet to come in a full minister to look after the ministry of IT as the state minister is the in-charge at the time when the government is all set to auction 3G spectrum in the first quarter of 2014.

In 2013, the court cases started against the auctioning due to non-transparent procedures adopted by the last government. Presently, a number of cases related with 3G spectrum, Youtube, and appointment of chairman and members of PTA are under proceeding in the superior courts of Pakistan. The Facebook was banned in Pakistan due to some objectionable content over the website. Though the government requested the social media publisher to remove the content, yet the number of requests was 35, lowest compared to others.

IT expert said all over the world intermediary liability protection (ILP) law is invoked to convince a social network website to expunge any objectionable materials. No such law has been passed in Pakistan, however, he added.

However, he doubted that an international website would be ready to remove any unpleasant content from its site. He referred a communication sent by Google to the government in which it expressed its indecisiveness to restrict the access or remove any material objectionable to Pakistan even after the introduction of ILP law.

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