ISLAMABAD, Sep 18 (APP): The Federal Minister for Information Technology and Telecommunication Syed Amin Ul Haque on Sunday expressed his concern over Nepra’s decision regarding the dismissal of a petition of Telecom Companies to grant an Industrial Electricity Tariff (IET).
In a statement, he said that the Telecom sector has been given the status of an industry by the government and it was the right of Telecom companies to get electricity tariffs at industrial rates.
“Giving maximum incentives to companies working in Pakistan will also encourage other International Investors” he added.
This matter is not only for the Telecom sector but, he said it can be an important step toward providing better facilities to the consumer and attracting future foreign investors.
Amin said; “It has always been our endeavour to handle the affairs of both the public and the stakeholders related to the IT & Telecom sector in an amicable manner so that the process of construction and development can be accelerated”.
Telecom company operators in Pakistan including Pakistan Telecommunication Company Limited (PTCL), Telenor Pakistan, Pak Telecom Mobile Limited (PTML), Pakistan Mobile Communication Limited (PMCL), CMPAK- Zong and Deodar Private Limited are providing mobile and broadband services benefiting 188 million subscribers of Pakistan with an annual turnover in a total of over Rs. 400 billion and creating direct and indirect jobs of 25,000.
The Telecom sector to date has brought foreign direct investment of over US$ 10 billion and continues to do so in the shape of License renewal, Spectrum fees Etc.
In the year 2004, the Telecom sector was declared as “Industry” by the Ministry of Industries and Production, Government of Pakistan vide notification dated 20.04.2004, therefore, all CMOs are entitled to benefit from all the concessions available to “Industry” including Industrial tariff of electricity for its towers and exchanges but it was never granted in letter and spirit.
Moving on, in the year 2014 – Thereafter vide U.O No. 2-7/2003-DT dated 18.06.2014 the Ministry of Information Technology, Government of Pakistan also endorsed the request of the Telecom Sector including Cellular Mobile Operators to be classified as an “Industrial Undertaking” under clause (b) of Section 2 (29C) of the Income Tax Ordinance, 2001.
In the year 2021, In line with the decision of the Federal Cabinet, the Government of Pakistan endorsed that all telecommunication companies operating under the license of the Pakistan Telecommunication Authority (PTA) have been specifically included in the definition of an “industrial Undertaking” by addition of clause (c) to section 2 (29C) of the Income Tax Ordinance, 2001 through the Finance Act, 2021.
Cellular Mobile Operators (CMOs) have filed multiple inventions with the NEPRA which was in the process of determining the Uniform Tariff of DISCOs throughout Pakistan to persuade the authority on this behalf. However, it was not entertained.
CMOs again filed a separate Tariff petition with the Authority on the merit that the Telecom sector falls under their Authority definition of creating value additions to the industry and it was argued that sectors of sectors are now benefiting from the connectivity that the Telecom sector has brought for the businesses.
On the contrary, NEPRA Authority in their verdict wrote that “Value Additions” used in the definition of Industry for the purpose of applying industrial supply tariff are used in the context of value addition through manufacturing or production process.
In case a broader meaning of the term “Value Addition” is assumed, a larger number of commercial activities will fall for the purpose of electricity tariff therefore based on this point the Authority has turned down the request of the much need respite for CMO’s and the petition has been dismissed.
