PTCL and its customers

It has often been assumed that the Pakistan Telecommunications Authority (PTA) has generally treated the PTCL with kid-gloves, since about 62 per cent of the company is owned by the federal government. So it is quite encouraging to note that the PTA is investigating an allegedly unauthorised 50 per cent price hike by the PTCL in the rates that it charges consumers for landline phone calls.

The PTA claims that it is acting in the interest of consumers against an alleged violation by the PTCL of the Fixed Line Tariff Regulations 2004. And indeed, according the show-cause notice, it seems that not only did the company fail to inform the regulators, it even failed to inform its customers about when the new pricing formula would go into effect. Should the company fail to cooperate with the telecom regulator, it faces a fine of up to Rs350 million. Yet, as with so many things in Pakistan, all is not what it seems.

In recent months, the government has been having a significant disagreement with its minority partner in PTCL, Emirates Telecommunications Corporation, or Etisalat, to which it sold a 26 per cent stake as well as management control in 2006 for $2.6 billion. This recent action by the PTA might be a salvo by the government in a larger battle against Etisalat. PTCL has allegedly increased its landline tariffs at least twice before without regulatory approvals and neither of those actions had triggered a response from the PTA.

For the regulators to come to the company now with a showcause notice seems to be nothing more than a case of misuse of government authority. The overriding criterion should be safeguarding the interests of all stakeholders, in particular PTCL’s customers, especially in the matter of call tariffs. The company has a long track record of surreptitiously raising call tariffs and disguising their increase through slick advertisements.