ISLAMABAD: The Cellular Mobile Operators (CMOs) have demanded moratorium on Universal Service Fund (USF)/ R&D (Ignite) fund contribution, as well as, a reduction from the current two percent to one percent, official documents revealed.

The operators have submitted telecom industry health-related recommendations to the government where major incentives were demanded. Regarding regulatory contribution/ fees, telecom operators have proposed that USF/ R&D fund contributions moratorium for two years followed by a reduction in USF to 0.75 percent and R&D to 0.25 percent of adjusted gross revenue of operators (reduce to a combined value of one percent from the current two percent).

Responding to the CMOs demands, the Pakistan Telecommunication Authority (PTA) has responded that the matter relates to a policy decision of the government. However, well-placed sources revealed that the Ministry of Information Technology and Telecommunication, as well as, the USF is not in favour moratorium on CMOs contribution as it would affect project implementation.

The telecom operators contribute around Rs6 billion to the USF and Rs2 billion to Ignite annually. The objective behind the proposal of moratorium is to reduce the cost of doing business and improve the industry’s profitability. However, sources revealed that if the government suspended the industry contribution, it might hurt the telecom sector expansion.

Sources further revealed that due to the issue in opening of letters of credit, import of mobile equipment affected badly and resulted in a delay in project implementation.

Copyright Business Recorder, 2023