PTA Allows Non-SMP Operators to Revise Tariff for Basic Telecom Services

SMP stands for Significant Market Power and by SMP operator, we mean a Telecom Operator that has been found to have Significant Market Power in any relevant market, either acting individually or in collaboration with any other party. So Non-SMP operators are those telecom operators that don’t have that much of a presence in the market as compared to the other ones. So for the Non-SMP operators, the Pakistan Telecommunication Authority (PTA) has drafted Tariff for Telecommunication Service Regulations, 2022 to ensure pricing flexibility while safeguarding the interests of consumers, that tariffs are set at a level that provides a reasonable rate of return on investments. Furthermore, it also accounts for operational costs, and also telecom providers should not cross-subsidize other telecommunication services.

PTA Allows Non-SMP Operators to Revise Tariff for Basic Telecom Services

In terms of the level of tariffs paid for providing telecommunication services to consumers, these restrictions will apply to all operators. As per the draft regulations, non-SMP operators are free to set and revise their Basic Telecom Service Tariff at any time and in any manner they see appropriate. However, they will have to notify the Authority and consumers at least one week in advance prior to the proposed applicability of the new tariff. It also entails that the date of notification to the consumers begins after any modifications made by the Authority, if any.

Only in the event that the proposed tariff for Non-SMP operators’ Basic Telecommunication Services is deemed to be exorbitant, the Authority may modify or reject it within seven days.

The following things would be taken into consideration when PTA receives Basic Telecom Service Tariff:

(a) the Authority on its own, or at the request of the affected Consumers may initiate enquiry to determine whether any tariff is burdensome; (b) the burden of proof shall be on the Licensee and they shall satisfy the Authority that the tariff is not burdensome; (c) the Authority, while making decision, may make reference to cost of Licensee, affordability of consumers, tariff of other licensee in similar circumstances, economic viability, or any other factor deemed appropriate by the Authority.

Furthermore, the Tariff shall be considered to be exorbitant if:

Profit to the licensee is abnormally higher than the reasonable rate of return taking into account the cost of operations, the tariff is beyond the affordability level of average consumers.

After giving the concerned licensee an opportunity to be heard, the Authority may adjust Licensee’s existing tariffs on its own or at the request of affected parties if they become burdensome owing to changes in circumstances.

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