In Pakistan competition means looting with both hands, now PTCL lowered its tariffs that cause stomach pains for others. in open market, they should also lower their prices bu instead they are asking the regulator to stop the low prices by PTCL.
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PTCL cuts tariff without regulator’s nod
Other players protest the telecom giant’s move
By Imran Ayub
KARACHI: Recent cut in tariff of local and international calls by Pakistan Telecommunication Company (PTCL) has triggered a new kind of debate among authorities concerned, as the recently privatised entity announced revised rates without regulator’s approval.
Telecom sources said the decision of the PTCL, announced a couple of days ago, to reduce tariff of international and local calls from its network, pushed other telecom operators to approach Pakistan Telecommunication Authority, which called an urgent meeting on Tuesday to review the situation.
“Discussions in the PTA’s meeting suggested PTCL didn’t get a nod from the authority for announcing fresh rates,” said a source close to the PTA and PTCL.
“It (PTCL) did submit the proposal to the PTA, which was under deliberations but the PTCL announced the tariff cut without the approval of PTA, which is mandatory under the law.”
He said the move provoked some 12 long distance and international (LDI) operators, which challenged the PTCL action under the defined laws of the telecom policy, hitting overall competition environment.
“As per clause 8.2 of LDI licence, an SMP (significant market player) cannot change its tariff without prior approval of the authority, as the PTA has to ensure a fair, healthy and competitive LDI market,” said the source.
He suspected the PTCL had deliberately initiated uncompetitive practices against all the LDI service providers and recent price reduction was a continuation of this ‘ruthless drive’ against other operators.
The PTCL cut local and international call tariff by more than 15 per cent in a first such move after the UAE-based Etisalat took over management control of the national entity a few months ago.
The fresh move brought tariff of nationwide (NWD) and long distance calls to Rs2 per minute, which indicated more than 15 per cent cut in rate of that particular type of service.
Calls from the PTCL network to local cellular services would now be charged at Rs2.50 per minute.
The PTCL management also took an initiative, which brought down tariff of NWD and long distance calls to any cellular service in the country at Rs3.00 per minute.
This would bring relief for over five million subscribers of the company across the country but other operators, which invested more than half a billion dollars in setting up their operations, branded the move an unhealthy business tactic, exploiting SMP status.
“PTCL is blatantly abusing its SMP status and wants to eliminate competition by using all sorts of tactics,” said Wahaj-us-Sairaj, Convener Telecom Operators of Pakistan in a prompt letter to the chairman PTA after the recent tariff cut by the PTCL.
“PTA is requested to kindly issue an immediate order asking PTCL to withdraw this tariff till revised interconnect rates under RIO (reference interconnect offer) are finalised by the PTA.”
Operators believe the fresh rate cut by the PTCL has jeopardised the business plans of all the LDI service providers. They see in view of current RIO rates of origination and termination, LDI operators cannot match this tariff, which clearly questions the viability of LDI business model.
“We request all the concerned and the authority to take prompt action to immediately revert the tariff announced by the PTCL, or with immediate effect reduce the interconnection charges by at least 50 per cent,” said Amer Shafique, Chief Operating Officer, REDtone Telecom.
He said unviable price war would discourage foreign and local investment and ruin the healthy market competition.