July 4, 2003	Friday	Jumadi-ul-Awwal 3,1424

LAHORE, July 3: The Pakistan Telecom Authority (PTA) has recommended to the government to remove the activation charges of Rs2,000 on new mobile phone as well as on those users who want to switch over from one network to another.

The PTA has made the recommendation because the activation tax curbs the competition between different mobile phone operators as well as restricts the choice of consumers, limiting the growth of the market size.

This was stated here on Thursday by Instaphone chief executive officer Lain Williams while talking to a group of reporters. “The cellular phone industry has seen enormous growth as a consequence of the improved regulatory environment in the last few years.

The PTA decision to introduce the Calling Party Pays (CPP) system has undoubtedly revolutionized the industry as the number of mobile phone users has grown to around two million from about 350,000 in less than three years,” he said. The removal of activation charge would further boost growth and competition, he added.

Williams described Pakistan an “underdeveloped” (mobile phone) market which has begun to develop because of the “changes brought about in the overall regulatory environment by the PTA.”

However, he said, with only 2.7 per cent tele density — the lowest in the world—Pakistan had a long way to go. “You need to spell out your long-term deregulation policy for the telecommunication sector in order to enable existing as well as intending telephone operators to make their future investment plan,” he said.

It was simply not possible for any investor to make long-term investment plans when no deregulation policy was in place, he said. However, he said, a lot of investment was being made by existing private operators to improve the quality and coverage area of their services.

In answer to a query, Williams claimed that the average annual revenue of less than $100 per user of cellular phones in Pakistan was also lowest in the region and the operators had just begun to make meagre profits on their huge investments after nine years of accumulated losses. He also claimed that the per minute price of a call from mobile phone was still lowest in the world. He added: “The post-paid market has almost saturated in the country but the pre-paid market had great potential for growth because low enders still did not have access to telecommunication.”

He called upon the government to “allow the existing operators to start the service in Kashmir and Northern Areas of the country.

He also demanded that the government must compensate all those mobile operators who had to suffer huge losses due to an 18-month long shut-down of service in Karachi in the early 1990s.