Stopgap measures hurt telecom sector in 2013

STAFF REPORT LHR: Stopgap measures hurt the telecom sector in Pakistan, while some controversies on the International Clearing House (ICH) and suspension of 3G auctioning due to violation of procedures reverberated throughout the last year.

However, the successfully launch of biometric verification system to counter the unregistered sales of SIMs, used in terrorism and criminal activities, is the most remarkable achievement.

The ICH was launched to curb grey cellular traffic, but actually legal traffic reduced nearly 30 per cent.

The issue of right of way (ROW) for the installation of base transceiver station (BTS) towers in cantonment areas across Pakistan has also remained unresolved during 2013. This issue marred the quality of services in the cantonment areas. Almost every subscriber of different cellular mobile operators (CMOs) underwent sudden signal outage, call drop and distortion in calls.

Moreover, increase in five percent withholding tax on telecom sector in the federal budget 2013-14 hampered the growth of and foreign direct investment in the sector. The stakeholders raised hue and cry over the tax, but to no avail.

An official at a cellular company said that new taxes in the budget have weakened the consumers buying power as well as revenues of the operators.

He hoped that the new-year would stabilize regulatory environment to enable the companies to better serve customers.

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