Service suspension: Spectre of losses returns to haunt telecoms
Industry says it has not been compensated for previous suspensions۔
KARACHI:
Considering that it was necessary to prevent a terrorist attack, few people criticised the government when it first suspended cellular services in the four biggest cities of the country for over 15 hours on Eidul Fitr this year.
But people complained when the government suspended mobile phone services across the country for up to 21 hours on September 21, as rioters went berserk on Ishq-e-Rasool Day. Reports now suggest the government is considering blocking the mobile telecommunication network for the third time to deal with a security threat on Eidul Azha.
While the government may have reason to believe that shutting down mobile networks can prevent a bomb from going off in a public place, the national exchequer is set to lose revenues in the range of Rs100-Rs200 million, according to sources in the telecom industry.
“The economy has suffered estimated losses of close to Rs1 billion because of the two suspensions,” one source said while requesting anonymity.
“Although the service suspension is being carried out based on Section 54 of the Pakistan Telecommunication Act, 1976, the government hasn’t compensated the industry for its losses, as mandated by the same section,” he added.
“Provided that the federal government may compensate any licensee whose facilities or services are affected by any action under this sub-section,” reads Section 54 of the Pakistan Telecommunication Act, 1976.
There are certain specific circumstances in which cellular services can be suspended, including a war against the country by any foreign power or internal aggression and upon the proclamation of emergency by the president.
While hearing a petition pertaining to the suspension of cellphone services on Thursday, the Sindh High Court said it could only be done after the president’s approval.
The telecom sector is among the largest contributors to the national exchequer, as its share last year stood at Rs120 billion. The sector has also been one of the biggest recipients of foreign direct investment (FDI) for the past few years.
Teledensity in Pakistan increased from 6.25% in 2003-04 to 72.1% in May 2012, which translates into 119.86 million subscribers at present. The telecom industry has generated close to 25,000 direct and more than a million indirect jobs.
Published in The Express Tribune, October 26th, 2012.
Considering that it was necessary to prevent a terrorist attack, few people criticised the government when it first suspended cellular services in the four biggest cities of the country for over 15 hours on Eidul Fitr this year.
But people complained when the government suspended mobile phone services across the country for up to 21 hours on September 21, as rioters went berserk on Ishq-e-Rasool Day. Reports now suggest the government is considering blocking the mobile telecommunication network for the third time to deal with a security threat on Eidul Azha.
While the government may have reason to believe that shutting down mobile networks can prevent a bomb from going off in a public place, the national exchequer is set to lose revenues in the range of Rs100-Rs200 million, according to sources in the telecom industry.
“The economy has suffered estimated losses of close to Rs1 billion because of the two suspensions,” one source said while requesting anonymity.
“Although the service suspension is being carried out based on Section 54 of the Pakistan Telecommunication Act, 1976, the government hasn’t compensated the industry for its losses, as mandated by the same section,” he added.
“Provided that the federal government may compensate any licensee whose facilities or services are affected by any action under this sub-section,” reads Section 54 of the Pakistan Telecommunication Act, 1976.
There are certain specific circumstances in which cellular services can be suspended, including a war against the country by any foreign power or internal aggression and upon the proclamation of emergency by the president.
While hearing a petition pertaining to the suspension of cellphone services on Thursday, the Sindh High Court said it could only be done after the president’s approval.
The telecom sector is among the largest contributors to the national exchequer, as its share last year stood at Rs120 billion. The sector has also been one of the biggest recipients of foreign direct investment (FDI) for the past few years.
Teledensity in Pakistan increased from 6.25% in 2003-04 to 72.1% in May 2012, which translates into 119.86 million subscribers at present. The telecom industry has generated close to 25,000 direct and more than a million indirect jobs.
Published in The Express Tribune, October 26th, 2012.