Pakistan’s Telecom Industry Facing Serious Challenges After Floods
Due to global financial and energy crunch, telecom industry of Pakistan is experiencing difficulties, particularly in the wake of recent floods and LCs problems.
The telecom industry in Pakistan is dealing with significant difficulties, particularly in light of the recent floods and the Letters of Credit issue, which are impeding project implementation and degrading services.
Senior Ministry of Information Technology and Telecommunication officials informed the National Assembly Standing Committee on Information Technology and Telecommunication, which met on Wednesday under the chairmanship of Mir Khan Muhammad Jamali, of this information.
The committee expressed grave concerns about the subpar quality of telecom services offered throughout the nation while claiming that cellular mobile operators (CMOs) were charging customers for 4G while still offering 2G services in Karachi and Islamabad.
Aisha Humera, an additional secretary in the Ministry of Information Technology and Telecommunication, stated that Telenor is considering leaving Pakistan due to high costs and low profits.
Later, the ministry released a statement in which it stated that the additional secretary for IT and telecom had discussed the context of telecom sector issues related to floods and LCs and mentioned that Telenor had previously experienced financial difficulties and had been the subject of similar news stories. Telenor has absolutely no intention of leaving the Pakistani market.
“USF under MOITT has awarded a project to Telenor Pakistan to improve broadband Internet coverage and improve customer service in Chitral, Lower Dir, and Upper Dir, which shows dedication and commitment by Telenor Pakistan.”
Due to the global financial and energy crunch, the telecom industry of Pakistan, including Telenor Pakistan, is experiencing difficulties, particularly in the wake of recent floods and LCs problems. The MOITT promptly addressed this and provided the committee members with a thorough assessment.
Telecom industry in Pakistan have been forced to choose cost-cutting measures due to the current economic crisis and associated liquidity problems.
According to MNA Aliyah Kamran, there would be more problems if Telenor left the country than just low profit margins. The committee was informed that Pakistan has the lowest telecom average revenue per user (ARPU). Additionally, imports were delayed as a result of the State Bank of Pakistan’s (SBP) restrictions on the opening of Letters of Credit (LCs), which hampered the implementation of projects.
Umer Malik, a member of the ministry’s telecom division, acknowledged the poor quality of services while claiming that the parameters for that quality were not on par with those of other nations in the region.
Approximately 1.5 million new internet connections are being added each month, according to him, but operators have not increased their capacity or complied with the regulations. According to him, the telecom industry generated Rs 654 billion in revenue in 2020–21 and Rs 691 billion in 2021–22.
Despite the poor economic climate, new businesses are entering the telecom sector, and 99 licences have already been granted. Malik reported that the recent floods in the nation had a negative impact on about 5,000 towers.
The committee was informed by the director general of the Pakistan Telecommunications Authority (PTA) that a fine of Rs. 29 million had been imposed on four cellular mobile operators (CMOs) for their failure to meet the quality of service standards laid down in their licenses.
Using a smart benchmark quality standard tool, the PTA recently conducted surveys in five cities, including Sialkot, DI Khan, Tando Allah Yar, Mardan, and Mastung. According to the survey, operators such as Jazz, Telenor, Zong, and Ufone were discovered to be non-compliant with regards to observing QoS parameters.
According to an official, Jazz was fined Rs 7 million by the PTA for failing to comply with the QoS requirements in Sialkot, DI Khan, and Tando Allah Yar. The authority fined Telenor Rs 6 million for failing to follow QoS guidelines in Sialkot, DI Khan, and Tando Allah Yar, and Rs 6 million in Mardan and Mastung.
Ufone was penalised by the PTA with Rs. 3 million for failing to comply with regard to observing parameters of QoS in Sialkot, DI Khan, and Tando Allah Yar, and Rs. 2 million in Mardan and Mastung. The authority imposed a penalty of Rs 5 million on Zong for its non-compliance with regard to observing parameters of QoS in Mardan and Mastung.
The government intends to convert buildings to solar power in order to save money on electricity, but according to the project director of Virtual University, there isn’t a single “certified solar panel technician” in the nation at the moment.
He added that there are only two certified technicians for hybrid electric vehicles in the entire nation. These two earn salaries of Rs0.55 million and Rs0.53 million from the Suzuki and Toyota companies, respectively.
Imam Junaid Member IT and acting MD PSEB informed the committee that only 15–20% of the nation’s 25,000 IT graduates meet market demands. Freelancers on DigiSkills.pk made $290 million.