ISLAMABAD, July 13: The government has given a green light to private telephone operations in the country under a new telecom policy unveiled here on Sunday.
It has fixed a $500,000 fee and a performance guarantee of $10 million for long-distance and international (LDI) telecom licence and a $10,000 fee for local loop (LL) fixed line telecom licence.
Minister for Information Technology and Telecommunications Owais Ahmad Khan Leghari told a news conference that under the new telecom policy approved by the cabinet, the private telecom operators would contribute 3 per cent of their gross revenues for research and development and Universal Service Fund (USF) to extend phone facilities to the remote areas.
He said two types of licences for fixed line operators would be issued. One, local loop (LL) licence within a PTCL region; two, a long-distance and international (LDI) licence, but a company could acquire both.
The policy will be revised after five years but the duration of the licences will be 20 years. The five-year tenure of the policy is to give confidence to investors.
Entry to both the LL and LDI market will be unrestricted and open. Anybody who met the licensing requirements would be eligible for a licence on payment of the prescribed fee, $500,000 for LDI and $10,000 for LL.
In order to ensure that only serious bidders enter the LDI market, stringent requirement of technical and financial capabilities and experience will be incorporated in the licensing documents. The decision to award a license will be preceded by an open public hearing process.
The existing licence holders of the telecom services in the country would continue to retain their current licences, and could compete for a new LDI or LL licence.
The tariffs of both the operators (LL or LDI) will not be regulated by the Pakistan Telecommunication Authority (PTA) until they attain a Significant Market Power (SMP) status. However, the PTA has the right to regulate tariffs in case of evidence of unfair and burdensome pricing to consumers.
The LDI licence holders will have to start roll-out by building at least one ‘point of interconnect’ in five of PTCL regions within one year of award of licence, and in all 13 PTCL regions within three years.
The LDI licence holder would be permitted to lease infrastructure from PTCL or any other infrastructure owner, but it must own a proportion of the transmission system and cables comprising its network.
The proportion will be 10 per cent in the first year, rising to 30 per cent in the second, 50 per cent in the third year measured in 2 Mbit/s multiplied by kilometres.
The LDI licensee will provide a performance bond of $10 million in respect of infrastructure and roll-out targets, and provide incoming and outgoing interconnection services, both for voice and data traffic, to all who may request it.
The LL licence holders will have to start operations with building and operating one point of interconnect within the prescribed period and in each licensed PTCL region where they operate at acceptable technical and quality standards.
The LL operators would not be allowed to carry voice calls between PTCL regions or long-distance international traffic but could carry voice mails between municipalities but only within a single region.
Both the operators (LL and LDI) would be required to provide regular reports to the PTA on quality and network implementation, and would be penalized for failing to meet the licence obligations or not using the allocated radio spectrum.
If no roll-out is made within 18 months of grant of licence, this could result in cancellation of the license or withdrawal of the allocated radio spectrum.
Both operators shall meet the requirements of authorized security agencies for interception of calls and messages as detailed in the telecom act of 1996.
The government would have the right to cancel any licence to safeguard the national security interests.
The operators will pay to the PTA a fixed annual fee, to be approved by the government, to reasonably cover the cost of regulation.
The PTA will have the powers to fix the floor price for both the local and international tariffs.
The USF will be used to provide telephone connections to areas where the facility is not available.
The minister said the telecommunication de-regulation policy was aimed at enhancing the present level of teledensity of 2.7 per cent to around 5.6 per cent by the year 2010, and to bring down telephone cost in addition to giving choice of service to the customers.
A deregulation facilitation unit (DFU) will also be set up in the ministry of Information Technology and Telecommunication to facilitate investors.
