OICCI urges govt to delink spectrum price from dollar
Pakistan’s telecom segment is one of the most heavily taxed sectors in the region, hindering its growth potential, while forcing consumers to bear the cost. PHOTO: FILE
The Overseas Investors Chambers of Commerce & Industries (OICCI), representing 200 foreign investors in Pakistan, has issued a plea to the PTA and the Ministry of Information Technology & Telecom (MoITT) to decouple the pricing of telecom spectrum from the US dollar.
The OICCI Regulatory Survey 2023 disclosed that its member companies have raised significant concerns regarding the practice of denominating telecom spectrum prices in US dollars. The organisation stressed that “rapid currency devaluations increase the cost of doing business and make it difficult for the telecom industry to execute any business plans.”
While a robust and stable telecom sector underpins the digital ecosystem, propelling various sectors of the economy and enhancing service quality for users, the financial well-being of the telecom industry has suffered due to the ill-advised policy of tethering telecom spectrum prices to the US dollar.
Industry insiders have warned that this situation has now reached a critical juncture, jeopardising the survival of the telecom sector. They emphasise the urgent need to dissociate the telecom license fee from the US dollar to safeguard the sector’s sustainability and ensure the delivery of vital digital connectivity for Pakistan’s advancement.
The State Bank of Pakistan’s recent State of Pakistan’s Economy report also highlighted formidable challenges confronting the telecom sector, such as high corporate taxes affecting its revenue prospects. According to the report, the country’s telecom sector maintains an average revenue per user (ARPU) of $0.80 per month, significantly lower than the global average of $8. This discrepancy underscores a precarious return on investment scenario for OICCI member companies compared to similar economies. ARPU serves as a pivotal metric for assessing the financial health of cellular mobile operators.
Read Telecom sector for tackling ‘digital emergency’
The letter from OICCI further underscores that the regulations governing cloud usage in the public sector hinder the development of specific procedures and do not align with the interests of international investors and companies.
OICCI has called upon the telecom regulator and the IT ministry to expedite resolutions to both of these challenges in order to stimulate the telecommunications and IT sectors associated with Foreign Direct Investment (FDI) in the nation. The organisation has also sought the opportunity to conduct interactive sessions with all its member companies, addressing all facets of promoting FDI in the digital sector.
Published in The Express Tribune, October 28th, 2023.
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