2015 Substantiates to be a Hard Year for the Development of Telecom Sector

During 2015 the telecom sector witnessed many milestones, but still it substantiated to be a little hard with respect to legislation, revenues, taxation and investment. There is an extensive list of happenings from Biometric Verification System (BVS) till merger of two operators Mobilink and Warid.

The summary of important events during 2015 that exhibited that it was a bit hard for Telecom Sector to develop are discussed below.

Re-verification of SIMs through BVS was made an essential part of National Action Plan (NAP) to limit identity theft and to assure that no unregistered SIM was being used in the country. Due to this reason total number of active SIMs dropped down from 139 million to 111.5 million. This move lowered the revenue of CMOs. According to figures till end of November 2015, the number for active SIMs has mounted again to 124.4 million, while total number of broadband subscribers reached 24.8 million.

2015 Substantiates to be a Hard Year for the Development of Telecom Sector

PTA claimed noteworthy decline in grey trafficking, besides decrease in voice call rates for Pakistanis abroad, after withdrawal of International Clearing House (ICH) policy. According to the government international incoming traffic raised to 1.6 billion minutes per month, up from mere 370 million minutes per month during ICH. The government is still trying to completely eradicate the grey traffic to evade any unlawful usage of telephony services.

The Telecom Policy 2015 proved to be a milestone for future growth and development of ICT and specifically telecom sector. The vision enunciated in the policy is accessibility of universal, reasonable and quality telecommunication services provided through open, competitive and well managed markets. It is anticipated that competition framework will make telecom market more proficient in terms of quality of service and choice of services offered to the consumers. The increase in taxes affected telecom industry.

The revenue for the auction of 3G/4G spectrum was revised to Rs 65 billion for 2015-16. To evaluate market demand for auction of left over 3G and 4G licenses, PTA hired a consultancy firm for this purpose.

In the same way FBR decided to conduct forensic audit of cellular companies to inspect tax collection and financial statements submitted by them. According to PTA , yearly cellular mobile revenue during 2013- 14 was Rs 322.7 billion which is 70% of the total telecom revenues. The telecom contribution to national exchequer, profits and investment also recorded decline during 2014-15.

Mobilink and Warid announced to merge their operations in Pakistan at the end of 2015, and as a result, after required endorsements a merged company with almost 45 million customers will arise.

The government and policymakers need to re-consider and re-organize their primacies, so that a more welcoming environment can be made that can invite FDI and subsidize to national progress.