Telecom player demands WHT abolition

A major mobile services industry player has urged the government to consider abolishing the withholding tax (WHT) on telecom sector in the upcoming budget for fiscal year 2023-24.

Highlighting the exorbitant taxes of 34.5% on telecom users, Jazz CEO Aamir Ibrahim emphasised that the withdrawal of WHT would promote the affordability of mobile broadband for the low-income segments of society. He foresaw average mobile data consumption reaching 12 GBs by 2028 and called for framing enabling policies in order to continue meeting Pakistan's growing data demand.

The cellular subscriber in Pakistan now uses an average of 7.5 GBs of mobile data per month (as of January 2023), a significant increase from just 2 GBs in 2018.

If this trend continues, the cellular subscriber could be using up ton GBs per month in the next five years. These insights were shared by the Jazz CEO while talking to The Express Tribune. He called telecom and internet crucial utilities for productivity, much like electricity for the third industrial revolution.

"Our industries, such as software development, IT-enabled services, and our marketplaces no longer rely on physical locations but instead operate on smart phones and require a reliable internet connection," he pointed out.

The growth in data demand has been supported by an investment of $4 billion by the cellular operators in Pakistan. While stressing that increased data growth delivers enormous socioeconomic dividends, Aamir cautioned that the telecom industry's dollarised cost structure had caused the average revenue per user (ARPU) to dip to $0.75 - the lowest globally.

"An ARPU below $1.5 is not sustainable for the industry to operate."