Telcos Demand Waiver on QoS, Rollout Obligations and Contribution to USF, Ignite

The Cellular Mobile Operators (CMOs) have demanded a moratorium on quality of service (QoS) and rollout obligations, a reduction in the telecom industry’s annual contribution to the Universal Service Fund (USF) and R&D Fund (Ignite), and a floor price uplift mechanism of voice and data to optimize base price. Official sources revealed that Chief Executive Officers (CEOs) of telcos presented their demands for the sustainability of the telecom sector in a recent meeting with Federal Minister for Information Technology and Telecommunication Syed Amin ul Haque. The demands of the telecom companies include (i) a moratorium on quality-of-service, (ii) a moratorium on rollout obligations, (iii) a reduction in the telecom industry’s annual contribution to the Universal Service Fund (USF) and R&D Fund (Ignite), and (iv) floor price uplift mechanism of voice and data to optimize base price. The ministry has asked Pakistan Telecommunication Authority (PTA) to provide a response on the issues and furnish legal procedures as per the rules. However, official sources said that if the government allows operators a moratorium on quality of service and rollout obligations and floor price uplift mechanism of voice and data to optimize base price, it would not only compromise the quality of services but would increase rates for consumers. The Senate and National Assembly Standing Committees have repeatedly expressed concerns over the poor quality of service of cellular companies across the country. Further, the general public through social media has also raised questions over the deterioration in the quality of telecom services. The IT minister recently said that a proposal is under consideration to give maximum fiscal space to telecom operators including suspending USF and Ignite contribution or minimizing it provided that the federal government announces incentives for this sector. The telecom operators contribute around Rs. 6 billion to USF and Rs. 2 billion to Ignite annually. The objective behind the proposal 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.