ISLAMABAD: The ample amount of regulatory measures in telecom industry although resulted in better than expected results during 2015 but proved to be a bit hard with respect to legislation, revenues, taxation and investment.
There exists a long list of happenings from Biometric Verification System (BVS) till merger of two operators Mobilink and Warid. The recap of major events during the year showed that
re-verification of SIMs through BVS was made an integral part of National Action Plan (NAP) to curb identity theft and to make sure that no unregistered or unknown SIM was being used in the country.
With this, operators were tasked to verify each and every SIM through BVS. As a result total number of active SIMs dropped down from 139 million to 111.5 million.
The telecom industry deployed 80,000 biometric machines for SIM re-verification drive while spent about $60 million in total on entire exercise.
The move slashed revenue of Cellular Mobile Operators (CMOs) and also hit the prospects of existing as well as unsold 3G/4G spectrum pretty hard. Since the biometric verification of SIMs, the number for active SIMs has climbed again to 124.4 according to data till end of November 2015.
Ministry of Information Technology framed Electronic Crimes Bill for controlling cyber terrorism/crimes and termed it a vital step towards protecting national integrity and security against any possible hacking, data intrusion or illegal access to sensitive government affairs.
Bill also aimed at ensuring public safety against cyber crimes such as data and identity theft and other related issues they face while on Internet.
The other major area was taxation on telecom industry which account for over 30 % of the total cost of mobile ownership. Resultantly, the increase in taxes affected telecom industry in term of slow investment.
In grey trafficking area, Pakistan Telecommunication Authority (PTA) claimed significant decline, besides reduction in voice call rates for overseas Pakistanis, after withdrawal of International Clearing House (ICH) policy.
The government on February 27 withdrew ICH policy and brought Access Promotion Contribution (APC) to Universal Service Fund (USF) to zero, which helped in eliminating grey trafficking.
According to the government international incoming traffic grew to 1.6 billion minutes per month, up from mere 370 million minutes per month during ICH. The government is still taking measures to completely eliminate the grey traffic to avoid any illegal usage of telephony services.
Moreover, as a landmark progress for future growth and development of ICT and particularly telecom sector, the Economic Coordination Committee approved Telecommunications Policy 2015.
The vision articulated in the policy is availability of universal, affordable and quality telecommunication services provided through open, competitive and well managed markets which can be used by people to benefit of the economy and society.
The policy has included various new elements like competition framework, spectrum strategy, spectrum sharing, satellite communication, Over the Top services, convergence etc., which were not present in earlier policies.
It is expected that competition framework will make telecom market more efficient in terms of quality of service and choice of services available to the consumers.
Major new element of the new policy relates to provision of a wholesome treatment for frequency spectrum management in the country.Satellite communications and provision of bandwidth and retail broadband and telecom through this medium have for the first time been addressed to structure and further grow the segment.
Proper business flow under set parameters will provide more clarity to satellite telecom based businesses while ensuring appropriate compliance.
With regard to 3G/4G Auction, the revenue target was upward revised to Rs 65 billion for 2015-16.
PTA, for the purpose, hired a consultancy firm to assess market demand for auction of remaining 3G and 4G licenses. However, chances for any further auction of 3G/4G spectrum look bleak.
Similarly, Federal Board of Revenue (FBR) decided to conduct forensic audit of cellular companies to scrutinize tax collection and financial statements submitted by them.
According to PTA annual cellular mobile revenue during 2013- 14 was Rs 322.7 billion which is 70 percent of the total telecom revenues (Rs 465.5 billion).
FBR, PTA and cellular operators are likely to formulate a way of forensic audit during coming months.
The telecom contribution to national exchequer, revenues and investment also registered decline during 2014-15 as compared to preceding year.
At the end of 2015, Mobilink and Warid declared to merge their operations in Pakistan and as a result, after necessary approvals a merged company with more than 45 million customers will emerge.
The number of active SIMs reached to 124.24 million at the end of November 2015 while total number of broadband subscribers reached 24.8 million at end of November 2015. The number of 3G/4G users grew to 21 million till November 2015.
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