Pakistan Is Heading Towards Digital Catastrophe Due To Wrong Policy Of Pegging Telecom License Price With USD: CMOs

According to the latest reports, Cellular Mobile Operators gave SOS call to the government on Wednesday. They warned that Pakistan is heading towards a digital catastrophe due to one of the wrong policies of the government. Due to pegging telecom license price with the US dollar and the non-opening of letters of credit, CMOs are fearing further degradation of services in the coming days.

Telecom License Price Tied With USD Seems A Wrong Policy

CEO Jazz, President and Group CEO PTCL and Ufone, CEO Telenor, and Kamran from Zong called on Federal Minister for IT and Telecom, Syed Aminul Haque. The meeting was all about the matters related to the IT and Telecom sector and issues being faced by the industry.

Reports claim that the chief executive officers of Pakistan’s largest telecom companies appraised the IT minister about the uncertainty that has been caused by the fluctuating exchange rate, rising interest rates, and fuel and electricity tariffs, making it quite impossible for them in order to make a business plan.

During the meeting, the pricing restrictions put in by the regulator were also discussed. Let me tell you that these restrictions did not allow operators to increase prices. The point worth mentioning here is that the current ARPU of 80 cents is the lowest in the world. For any industry to survive it must stay above $1.5 in terms of dollars.

There is no doubt that the devaluation of Pakistani rupees has jeopardized the business case for telecom companies, as telecom license fees and interest on installments are pegged to the US dollar. The Continuity in the devaluation poses the biggest threat to the telecom industry.

Another issue discussed in the meeting was the delay in finalizing the infrastructure-sharing policy which can help reduce their expenses manifold. Moreover, due to restrictions on opening LCs, telecom operators are not able to upgrade their capacity and meet the growing demands.

We all know that with the change in weather, load shedding is expected to further increase, so, the telecom networks that are running on the backup power supply and telecom services are further expected to deteriorate. The increasing outages in different parts of the country will make it difficult to keep the network up and running.

The federal minister for information technology and telecommunication said to the CEOs that the government is well aware of the issues faced by the telecom sector. He assured that the ministry promises to put a complete picture of the scenario before Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar so that immediate action could be taken to resolve the issues.

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