Government’s Mobile Phone Installment Scheme – Will it Work in Pakistan?

The Ministry of Information Technology and Telecom (MoITT) has concluded its policy for offering smartphones to citizens via installments. The policy has also included measures to curb the misuse of mobile phones by defaulters. As per a source, all mobile companies have agreed to the policy, which includes the blocking of phones for those who fail to pay their planned installments.

Blocking Phones of Defaulters:

The proposed policy is backed by the national telecom regulator, Pakistan Telecommunication Authority (PTA). It intends to block the mobile phones of defaulters who do not meet their installment obligations. The implementation will be conducted through the Device Identification, Registration, and Blocking System (DIRBS). It is pertinent to mention here that the system is already utilized for blocking unauthorized or smuggled mobile phones.

SIMs and CNIC Blockage:

Furthermore, the blocking of SIM cards and CNICs is also expected as a penalty. However, it will be addressed later. Currently, the primary emphasis is on blocking the mobile phones of defaulters.

Formalizing the Policy: Legal Vetting and Cabinet Approval:

To formalize the policy, MoiTT plans to send it to the Law Ministry for a thorough legal examination. Once approved, the policy will be submitted to the federal cabinet for final approval. Afterward, the national telecom regulator will be responsible for the implementation of the policy, making sure that defaulters face consequences for non-payment of installments.

PTA’s Previous Request and Future Enforcement:

It’s important to mention here that the PTA had previously advocated for the formulation of a policy to address defaulter issues and asked for the blocking of mobile phones as an enforcement measure. The new policy seeks to address these concerns and strengthen the regulatory framework for smartphone transactions.

Our Suggestions & Insights

Slow Progress on Kisstpay Scheme:

About a year ago, the Global System for Mobile Communications Association (GSMA) and Kistpay in partnership with the Ministry of Information Technology and Telecommunication,  jointly launched the ‘Smartphone 4 All’ initiative. This program aims to provide accessible smartphone ownership for low- and middle-income consumers in Pakistan through convenient installment plans. The event, held at a local hotel in Islamabad, was honored by the presence of Federal Minister for Information Technology and Telecommunication, Syed Amin Ul Haque. Various dignitaries, including the Secretary of IT (in charge), Member Telecom, Member IC, Member Legal, and other officials from the IT and telecom industry, also attended the event.

However, a year has passed, and there has been no implementation of the scheme. This lack of progress raises questions about the effectiveness of the initiative.

International Comparison: BNPL Trends

The buy now, pay later (BNPL) schemes have long been established in foreign countries such as the US, UK, etc. The delayed progress in Pakistan underscores a potential requirement for the country to catch up with international trends in enabling installment-based purchases.

Operator-Driven Markets as an Alternative Model:

In some countries, installment schemes for smartphones are managed directly by mobile operators without direct involvement from regulatory bodies like the Pakistan Telecommunication Authority (PTA). Exploring such operator-driven models could provide insights into alternative approaches for the effective implementation of installment plans.

High Smartphone Prices and Consumer Preferences:

The high cost of flagship smartphones creates a demand for installment schemes, as consumers often prefer spreading payments over time. The necessity of installment plans in the context of expensive flagship devices should be considered in crafting and evaluating policies.

 

The government of Pakistan should consider these suggestions and devise a deliverable framework for the installment scheme. Otherwise, it will be subjected to hiccups as seen before and mismanagement can lead to policy failure.

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