ISLAMABAD: The chief executive officers of Pakistan’s largest telecom companies have warned that the country is heading towards a digital catastrophe due to the wrong policy of pegging telecom licence price with the US dollar.
“Due to the uncertainty caused by the fluctuating exchange rate, rising interest rates, fuel and electricity tariffs, made it impossible for them to make a business plan,” they added.
In a tweet, Hatem Bamatraf, CEO, PTCL Group said: “With constant devaluation of PKR against USD, the cost of doing business has significantly increased in the country. The expectation from telcos to invest heavily in infrastructure modernization while earning in PKR, is becoming detrimental to the dream of Digital Pakistan. We must act now and devise a strategy for regulatory relief to avoid slowing down the digital development of the country.”
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Hatem went on to say that the situation has made business planning impossible due to the uncertainty caused by the fluctuating exchange rate, rising interest rates, fuel and electricity tariffs. On top of that telecom industry remains heavily and unfairly taxed.
CEO Jazz Aamir Ibrahim in a tweet said that the devaluation of Pakistani rupees has jeopardized the business case for telecom companies, as telecom licence fees and interest on installments are pegged to the US dollar. Continuous devaluation poses the single biggest threat and precludes any sound financial planning whatsoever.
“Last year 50 percent licence renewal fee cost us Rs 44.5 billion, and this year, just 10 percent installment alone costs over Rs 13 billion. Due to ongoing currency devaluation we are unable to determine the amount we have to pay in installment next year adding to uncertainty that no business plan can withstand. Sadly, wrong policy of pegging telecom licence price to US dollar pushing us from a Digital Emergency to a Digital Catastrophe,” he added.
Irfan Wahab, CEO, Telenor Pakistan also shared his concern and said: “While telecom industry generates its revenue in PKR; spectrum auctions, renewal and installments are priced in US dollar exposing telcos to massive currency devaluation risk. Need to fix this mismatch before telecom companies’ capacity to further power digital transformation gets irrevocably depleted.”
Copyright Business Recorder, 2023