STAFF REPORT LHR: The PTA has given one month to cellular mobile operators (CMOs) to explain discrepancies in their on-net and off-net tariffs, which are leading to unhealthy competition and price wars, thus impacting the overall industry.
The telecom authority has issued a consultation paper highlighting that although CMOs have positive gross margins, some are sustaining losses.
Moreover, consolidation in the industry is taking place to deal with such low tariffs.
Discrimination between on-net and off-net tariffs which favors on-net calls creates a cult behavior whereby related subscribers club into a particular network to take advantage of lower on-net call price.
Moreover, low tariffs are exploited through increase in grey traffic.
This is attributed to the fact that Pakistan has one of the lowest call charges in the world.
This is also impacting fixed line operators as consumers favor their mobiles rather than fixed-line telephones to make calls.
CMOs compete on prices and offer low tariff to attract subscribers.
PTA has been given the suggestion of setting a price floor which would essentially curtail the volume of promotional offers being offered by CMOs.
The authority has given one month to CMOs to give their feedback on the same.
Experts believe setting of price floor will not be practical as cost varies among operators (higher for small operators.