Pakistan’s telecom sector boom needs improved collaboration, rationalized spectrum & licensing mechanisms: Speakers

ISLAMABAD, July 10 (SABAH): The speakers at the public-private dialogue to mull over information technology (IT) and Telecommunication Sector potential and challenges here on Wednesday demanded the stakeholders including government, regulators and market players to forge strategic collaborations with rationalized spectrum and licensing mechanisms to remove bottlenecks impeding rise of the sector.

The Sustainable Development Policy Institute (SDPI)’s study group on IT and Telecommunication organised the Public-Private Dialogue on State of competition in Telecom Sector and ways to promote it. 

In his opening remarks, Brig (retd) Muhammad Yasin, Senior Advisor Emeritus SDPI said the telecom sector is the backbone of country’s economy whereas education, health, industry, defence, and agriculture depend on it.
The robust and competitive environment was essential for telecom sector to thrive, whereas meaningful regulations and collaborations among the services providers were badly needed to promote sector development, he added. He mentioned that infrastructure sharing among telecom operators would reduce cost of business and improve service delivery, whereas in rural areas over the years there has been a cutthroat competition and absence of collaboration among the competitors that has resulted in reduction of internet service providers from six to three in the country. 

He said current unhealthy competition has resulted into decline in network quality as 4G has not penetrated to its potential and the country was lagging in the region as per global reports.

Arif Sargana, DG, Pakistan Telecommunication Authority said despite many problems and issues, the sector was facing competition in the telecom sector which was far beyond other sectors and was not strictly imposed by the regulator. He commended that the experts have rightly pointed out to maintain competition in the sector and as a regulator, PTA also supports the idea to not peg spectrum with US Dollar at the moment as its difficult for any investor and business to invest in the country with a volatile currency situation. He added that the Authority’s role is challenging as to maintain competition and manage consumers simultaneously as high inflation had hit the consumers. For competition, he said the PTA has regulations to maintain it in the telecom sector by terminating the SMP and regulate the dominant peer only in Pakistan and allow remaining players to set their tariff.

Ahmed Qadir, Director General, Competition Policy, Competition Commission of Pakistan said the Commission was an overall economic and behavioural regulator and telecom sector was not the direct focus of its regulatory and enforcement ambit. He added that Pakistan Telecommunications Authority (PTA) was the lead and dynamic regulator of the sector instrumental in bringing radical change in telephonic and mobile landscape of the country.

At the same time, he said telecom sector like the aviation sector was facing over competition from increasing local and international competitors leading to reduction in declining telecom service providers.

He added that mobile operators ability to operate would severely compromise in the case of no spectrum procurement that required a whole of government approach. “If large amount of revenue is paid to the telecom sector then are we getting commensurate level of services whereas there are many issues reported in major issues like line dropping, lack of mobile data availability and others exist,” he added.

The regulatory framework burdens market entry by facilities-based competitors that it limits competition within service providers of same service with different aspects of the technology, he said.

Muhammad Aslam Hayat, Senior Policy Fellow, LIRNEasia highlighted the bottlenecks of market structure, regulations and licensing mechanism that were impeding massive rollout of telecom services in the country. “It’s a market of Rs240 billion and a lucrative market but players are leaving the sector which is leading to poor quality services to the customers,” he said. He alleged that all stakeholders are responsible for the problems of the sector like government actions, PTA regulations and the service providers. Moreover, corrective steps were required to improve the situation by all the players like government needs to review and redesign the market structures, shift to unified licensing, delink spectrum from service licensing, rationalizing spectrum pricing, and reduce tax burden on consumers.

However, PTA needs to allow retail tariff increase, encourage new entrant in cellular market, develop exit regulations for inefficient operators, loosen retail tariff, reduce regulator burden on industry, sector needs to compete rationally, have louder voice, and strengthen telecom operator association, he added.

Fatima, Jazz said telecom sector is the layer of infrastructure on which the entire economy works which is a growing market in the country.

She pointed out that there was no association of telecom industry for a collective voice like other industries. “Quality is the biproduct of how much the company can invest back in the business and the current economic challenges have impacted it,” she added. There was a need to have collective action to embrace digitalization for the future generations, she said.

Parvez Iftikhar, International ICT Consultant said there was no need for promoting competition in the telecom sector as it was already facing too much competition in the market that was benefitting the consumers. “The consumers are enjoying the lowest mobile data tariff and are very happy. However, the competition is so extreme that no tower sharing exists among different service providers and every company wants to have its own infrastructure,” he said. Amid the trailblazing competition, the telecom industry revenues were declining and resulting in negative FDI as there was no investment in fiber penetration that resulted in bad and low quality broadband speed which was the lowest in the region, he added. He added that there were difficult choices to either increase revenues or set floor tariffs for a limited period of two years, set moratorium on USF and Ignite payments for two years, support the telecom operators association, improve overall situation to accelerate digital infrastructure development, bring spectrum reforms, improve terms and conditions and stop dealing spectrum prices in dollars.

Ameena Sohail, Former Member Legal MoITT said there were systematic and regulatory issues in the telecom sector that hindered healthy competition, whereas no work was done after 2019 on sector improvement due to increased problems in the sector. She suggested organizing targeted and sector specific dialogue to workout suggestions that were workable to resolve issues faced at different tiers of the sector.