Telecom Operators Raise Alarm Over ONT Price Hike- How It Will Impact The End Users

The Telecom Operators Association (TOA) has voiced serious concerns about the recent 300% price increase in fibre broadband routers. The association warns that this drastic ONT price hike contradicts the government’s Digital Pakistan Vision and threatens the expansion of broadband infrastructure across the country.

In a formal letter addressed to the Ministry of Information Technology and Telecommunications and the Federal Board of Revenue (FBR), the TOA described the valuation set by the customs department as unrealistic and damaging.

Unprecedented ONT Price Hike

The controversy stems from Valuation Order No. 1931/2024 issued by Pakistan Customs, which has significantly raised the prices of ONTs. The price of ONTs with RF (cable TV) ports has jumped from $50 to $165 per unit, while Wi-Fi-only ONTs have increased from $27 to $44 per unit.

ONTs are specialised devices used exclusively by fibre broadband operators such as PTCL, Nayatel, Cybernet, and Transworld. These devices are essential for expanding fibre-to-the-home (FTTH) broadband services, which are critical for high-speed internet access.

Industry Concerns

The telecom sector has strongly opposed the valuation, arguing that it is arbitrary and disconnected from real market dynamics. According to the TOA, the customs department ignored the actual import invoices submitted by the operators and imposed an inflated valuation.

Moreover, the association has highlighted a critical flaw in the customs ruling: the misclassification of ONT prices based on Wi-Fi speed generations (Wi-Fi 4, 5, 6, and 7). The TOA clarified that there is no technical correlation between RF ports and Wi-Fi speeds, rendering the pricing methodology flawed and unscientific.

Another issue is the lack of local manufacturing for ONTs, which means operators must rely on imports from international vendors like Huawei, ZTE, and Fiberhome. These devices are purchased at standard global rates, which the customs department’s valuation fails to acknowledge.

Potential Impacts

Telecom operators warn that the significant increase in ONT prices will directly lead to higher internet equipment costs. This will make broadband services more expensive for end users, particularly those in lower-income brackets. The TOA fears this could stagnate broadband penetration in Pakistan, contradicting the government’s aim of making high-speed internet accessible to all.

The association has urged the Ministry of IT to take up the matter with the FBR and ensure a fair, market-driven valuation mechanism. It also recommended that future valuations be based on actual import data from the past six months, with biannual reviews to avoid arbitrary pricing.

A Call for Transparency

The TOA emphasized the need for consultation with key stakeholders like the Pakistan Telecommunication Authority (PTA) and the Pakistan Electronic Media Regulatory Authority (PEMRA) during the valuation process. Such collaboration would ensure informed and balanced decision-making.

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A Blow to End Users and Digital Goals

The arbitrary increase in ONT prices could have a ripple effect on Pakistan’s broadband sector, ultimately hurting end users. Higher equipment costs will translate into costlier broadband packages, making high-speed internet inaccessible for many. This could widen the digital divide, particularly in rural and underserved areas, where broadband adoption is already slow.

Moreover, the policy inconsistency undermines the government’s Digital Pakistan Vision, which aims to foster technological progress and economic growth through digital connectivity. If left unaddressed, the price hike could significantly hamper the country’s broadband expansion, stifling innovation, economic opportunities, and societal growth.

The issue demands immediate attention to align valuation practices with the country’s broader digital transformation goals.