Pakistan Telecommunication Authority (PTA), has announced substantial reduction in different categories of PTCL bandwidth tariffs which would have positive impact on broadband proliferation, IT enabled services and telecommunication market.

Decision to this effect was taken by the Authority today at PTA Headquarters. Issuing a detailed determination on bandwidth tariffs, the Authority has directed PTCL to reduce its tariffs.

Speaking on the occasion the Chairman PTA said that the industry has been approaching PTA for quite some time requesting the Authority to regulate the bandwidth tariffs.  They have been emphasizing that the tariffs charged by PTCL are abnormally high and thus do not give them any competitive advantage in the International Market. Moreover, some investors have also contested that the current tariff structure is discouraging them to make investment in Pakistan as it is cheaper to acquire these facilities from other Asian countries.  This entire scenario is hampering the broadband proliferation and affecting the growth of IT enabled services in Pakistan that are heavily dependent of bandwidth tariffs.

The Authority had earlier issued a Determination on this issue on June 23, 2006 directing PTCL to revise its bandwidth tariffs. PTCL however, filed an appeal with the Lahore High Courtâ??s Rawalpindi Bench. LHC on August 7, 2006, after mutual agreement between the Authority and PTCL directed the Authority to decide the case strictly in accordance with law within 60 days. The Authority subsequently issued a detailed consultation paper on the subject and received the feed back from the stakeholders. In order to give full opportunity to the stakeholders the Authority also held hearing on the subject on September 22, 2006 and October 5, 2006.

The hearings were conducted by the Authority comprising Chairman PTA Major General (R) Shahzada Alam Malik, Member Finance Syed Nasrul Karim A Ghaznavi and Member Technical Dr. Mohammad Yasin. It was attended by Senior Management of PTCL, Wahaj-Us-Siraj, Convener ISPAK (North), Sohail Qadir of Worldcall, Kamran Malik of TWA and representatives of the other telecom operators. The operators presented their recommendations and suggestions for the growth of telecom and broadband services. The Authority after considering the arguments of all stakeholders has issued a fresh Determination and announced that the bandwidth tariffs of PTCL should be in accordance with the international benchmarks of countries where effective competition exists.

As for International Private Leased Circuit (IPLC) tariffs effective from January 1, 2007 the E1(2M bps) for ISPs will be US$ 2,100 instead of US$ 3,000 whereas for voice operators it shall be US$ 2,300 instead of US$ 2,852. Similarly for DS3 (45 M bps) ISPs will pay US$ 16,800 instead of US$ 48,000. STM 1 (155 M bps) price will be US$ 48,300 and 52,900 for ISPs and voice licenses respectively.  In addition to the above measures the Authority has also directed PTCL to provide E1 (2M bps) at US$ 1,000 on shared basis from January 1, 2007 as being provided by various other countries such as India.

Similarly data & voice services rates of Internet Protocol (IP) have also been reduced significantly from January 1, 2007. E1 rates will be US$ 1,500 instead of 1,600, DS3 will be US$24,000 instead of 25,000 and STM 1 will be US$46,500 instead of 60,000. Furthermore IP tariffs for Voice Services for Long Distance and International (LDI) operators have also been revised and reduced by 31% to 48% which would be effective from January 1, 2007.

The DPLC tariffs for voice services have also been reduced by 20% to 30%.

The decision of the Authority will have a far reaching implication for the growth of telecommunication market and investment in the IT & Telecom Sector in the country as bandwidth cost is a critical input for the investment and proliferation of broadband services. At present Pakistan has around 60,000 broadband subscribers and according to ITUâ??s recent report Pakistanâ??s internet tariffs in West Asia are amongst the least affordable countries. With the reduction in bandwidth cost the broadband service providers will be encouraged to offer higher bandwidth to their customers thus resulting in increase in usage of broadband services.

Khurram Ali Mehran

Deputy Director (PR)