PTA starts process to set retail prices level for broadband services

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PTA starts process to set retail prices level for broadband services

ISLAMABAD, Nov 24 (APP): Pakistan Telecommunication Authority
(PTA) has sought consultation from all telecom users, stakeholders
and general public, asking them to submit their views on price floor
regime for mobile broadband services.

The Authority has decided to introduce the regime to address
issue of unhealthy competition and protect and maintain
profitability of the telecom sector.

PTA has planned to set minimum level of retail prices for
mobile data and broadband services, while the minimum mobile
broadband speed would also be realized upwards.

PTA’s consultation paper on Recommended Price for Data
Services has said to protect and safeguard interest of consumers as well as operators there is a need to set a level of retail tariffs/
prices which should encourage operators to further invest in their
networks and acquire more spectrum to continuously improve Quality of Service (QoS) while offering competitive and affordable services to their subscribers.

In this regard, the minimum Mobile Broadband speed would also
be realized upwards.

The Authority is of view that appropriate price for data
services will lead to benefits which include introduction of healthy
and competitive regime leading to expeditious network rollout of
services and investment in mobile broadband segment for sustainable mobile broadband proliferation.

The other benefit would be enhanced QoS that satisfies
growing needs of consumers (individual as well as SMEs with specific reference to digitalization of services (Internet of Things, E-
Governance, E-Health etc.) and increase confidence of
consumers in use of mobile broadband by reducing free access with
potential non-social use of social media and channelizing the
youth in a more creative direction.

Considering aforementioned advantages, PTA has sought
comments on issue highlighted in this consultation paper within two weeks.

“The current pricing mechanism under intense competition among
mobile operators was not sustainable for a longer term.

Resultantly, it may slow down investment in broadband network, which was required continuously to meet the quality of service standards and bandwidth requirements of 3G and 4G and other digital services,” reasoned PTA in the consultation paper.

PTA has also received a request from one mobile operator to
regulate prices of data services with objective to ensure increasing
demand of consumers for enhanced mobile broadband services, while preventing potential market failure.

“If the regulator sets floor price for data services, it would
be a win-win situation for everyone involved as it would pave the
way for cellular operators to improve quality of service and
consumers could get seamless mobile internet connectivity.

Telecom companies invested heavily in licenses, but there was
no extension in 3G and 4G network roll out and the Foreign Direct
Investment (FDI) in telecom sector has been declining mainly due to slow return on investment (RoI) ratio.

“Regulating the data tariffs was a viable option to support
struggling telecom industry as it would benefit all, consumers would
have better services, operators would have improved profits and the government would have strong revenues in terms of taxes,” said an expert on Thursday.

PTA said there was an intense price war among operators for
provision of data services even in the nascent stage of the mobile
broadband data proliferation. This situation has led unlimited
pricing offers and promotions resulting in consumers to make
impulsive decisions without considering and comparing with other
packages, lesser incentives for operators to invest in their
networks and acquire more spectrums from time to time in order to
meet the quality of service and bandwidth requirements of
accelerated digitalization.

Also, there has been general increase in the price of goods
and services owning to inflation and other factors, while mobile
communication was the only sector in Pakistan which has witnessed
constant decline in prices and tariffs owing to technological
advancements and price wars.

Therefore, it becomes imperative that appropriate action in the
form of minimum price should be initiated to bring stability in the
broadband market, PTA added.