Mobile phone curfew: Communication blockade cost telecos Rs3 billion

Govt suspended cellular services after receiving terror alert.

Given that the telecom sector is taxed at a rate of 19.5%, the communication blockade also cost more than half a billion rupees to the national exchequer. Apparently the government was willing to forego the tax revenue for the safety of the people. Telecom companies are silent on the merits of this decision.

Based on the consumer data that telecos have, Karachi, Lahore, Multan and Quetta account for 25% to 30% of their total consumer base; a telecom source told The Express Tribune while requesting not to be quoted. The services remained suspended for about 12 to 15 hours, the source said, at a time when the use of services increase by five times at least.

“Based on the information we gathered, the losses are estimated between Rs2.5 billion to Rs3 billion,” he said.

On August 19, Pakistan Telecommunication Authority (PTA), the regulatory body for telecom sector, instructed cellular operators to block their services in the major cities for 15 hours on the eve of Eidul Fitr. Prime minister’s Adviser on Interior, Rehman Malik; according to The Express Tribune, justified this decision citing threats against the country. Since militants use remote-controlled bombs detonated by cell phones, this was an unfortunate but necessary step to take, Malik said.

The telecom operators, The Express Tribune contacted, sounded upset with the blockade – two operators did not respond at all. One operator said they were still assessing as to how much they had lost during the closure.

The telecom sources expressed discomfort over Malik’s statement, in which he talked about permanently blocking the prepaid services. They, however, refused to speak on record, or come up with any kind of explanation as to how so many prepaid sims were in circulation without proper documentation.

The media’s coverage has already opposed Malik’s idea to ban prepaid services, a telecom source said. If the government bans prepaid services, he said, the telecos will have no option but to pack up.

If the government – which is already treating the blockade as a successful strategy, as it appears from Malik’s statement – adopts the same strategy for other special events like Eidul Azha, the 9th and 10th day of the Islamic month of Muharram; the losses to the national exchequer will be in excess of Rs1 billion.

The silence on part of the telecom operators is likely to encourage the government for such actions in the future.

Published in The Express Tribune, August 24^th, 2012.