Rising operation costs hurt telecom sector

Telecom sector seeks urgent policy interventions to remedy ‘digital emergency’

ISLAMABAD:

A leading telecom company has voiced concern over the high cost of doing business in Pakistan. Due to an unprecedented rise in the cost of operations, the telecom industry has been severely impacted.

The company has called for the government to provide fiscal space critically required to ensure its survival and support Pakistan’s digital inclusion objectives.

VEON Group CEO, Kaan Terziolu called on the Federal Minister of IT and Telecommunications, Syed Aminul Haque along with EXOR representatives and Jazz CEO, Aamir Ibrahim.

During the meeting, discussions were held relating to the telecom sector, import of essential telecom equipment and investment opportunities. The IT minister was also briefed as to the connectivity status in flood affected areas.

During the meeting, Terziolu and Ibrahim apprised the minister about Jazz’s investment in Pakistan. They also highlighted that a healthy and stable telecom sector – the foundation of a country’s digital ecosystem – fuels virtually all other sectors of the economy and is a prerequisite for consistent improvement in service quality for users.

During the meeting, they also raised several issues that are causing hurdles in the operations of the telecom industry.

The telecom industry is facing hurdles in operations primarily due to rising costs linked to fuel, electricity, interest rates, the constantly increasing dollar pegged spectrum instalments and most recently, severe damage caused by the floods to critical digital infrastructure.

To remedy this ‘digital emergency’, the telecom sector seeks urgent policy interventions from the government to provide the required fiscal space to ensure its survival.

These measures include denominating spectrum payments in rupees and extending payment terms to 10 years instead of five. In addition, the telecom sector has called for the suspension of the industry’s annual contribution to the Universal Service Fund (USF) and Ignite for a period of two years.

Other interventions that the telecom industry sought include the removal of prior approval requirements imposed by the State Bank of Pakistan (SBP) for telecom equipment import and reduction in withholding tax from 15% to 8% on essential telecom services.

While addressing the delegation, Haque stated that Jazz’s total investment in Pakistan had crossed the figure of $10.3 billion. This includes around $1 billion in the last four years alone on network expansion and upgradation.

“These figures show that Pakistan is an investment friendly country and we are providing maximum support to the telecom sector for its growth,” Haque added.

He said that there are vast investment opportunities in the fields of e-health, e-education, e-agriculture and e-commerce in Pakistan.

“Healthy competition in the telecom sector is essential for providing better connectivity to consumers. Therefore, resolving the issues of the sector is a top priority. For this purpose, the telecom committee has made recommendations regarding the problems faced by the telecom sector and submitted them to the prime minister’s advisory council on IT and Telecom,” Haque explained.

Published in The Express Tribune, September 9^th, 2022.

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