'Higher taxation on telecom sector poses challenges'

The visiting VimpelCom's Co-Founder and Chairman Augie K Fabela said on Monday that higher taxation on telecom sector in Pakistan poses challenges and it is not yet decided whether or not they are participating in the upcoming spectrum auction. "We have already invested in both Mobilink and Warid to the tune of $8.2 billion and will continue to invest more in Pakistan," the visiting co-founder VimpelCom said while briefing journalists here on Monday.
Replying to media quarries, Augie, CEO Jazz Aamir Ibrahim and Ali Nasser Chief Corporate Affairs stated that Information Memorandum (IM) has not yet come out so they cannot predict whether or not their company is going to participate in the upcoming auction.
The co-founder VimpelCom said that taxation burden is hurting customers instead of reducing profits. He said that the telecom industry would have to make adjustments to compete with WhatsAPP, Ali Baba and other such services.
He said that the future lies in digital services and they will have to compete with global players which already exist into the market. "Instead of connectivity, the digital services are the future of our vision and this sector," he maintained. More than 1,800 Mobilink and Warid employees have opted for VSS, Aamir, Ibrahim, CEO of Jazz (former Mobilink) revealed. Aamir Ibrahim while explaining the agitation from Warid franchisees said there are a total of about 660 franchises of both Warid and Mobilink.
He said that some 260 franchises out of the total number were terminated and it included both from Warid (80 percent) and Mobilink (20 percent).
"Naturally it was not possible for us to keep all of them, especially in cases where both Warid and Mobilink franchisees were next to each other," he explained. Aamir said that in order to find optimal distribution of franchise network for customers, company had to let go some of franchises. Aamir said that company hired international consultants and third party appraisers, who were not part of the management, to get a clear view on demand of franchisees and fulfil customers' needs.
The CEO further explained that an amicable exit was also designed while keeping multiple factors in mind.
He recognised that some of the franchisees are upset but said that one third of all terminated franchise partners have accepted the terms, signed the letters and collected their severance benefits.
Ali Naseer, Chief Regulatory and Corporate Affairs Officer at Jazz, while adding to Aamir's comments said that severance package that Jazz has agreed to pay to terminating franchisees was way above the contractual obligations.
"Now that still may not be good for someone who feels that they were doing a great job, but it was not possible to sustain not only for us but for them as well," added Ali Naseer.-PR