LAHORE: More than a year after the Pakistan Telecommunication Authority (PTA) began a review of the existing mobile termination rate (MTR) — the price a cellular mobile operator charges another operator for receiving a call (from it) on its network — the regulator is yet to make a decision on slashing the off-net call costs for consumers.
The regulator had sought opinion of the operators on developing a strategy to decrease off-net call prices in September last year because the present MTR or interconnect usage price of Rs0.90 per minute being charged from users since 2008 is considered much higher compared to countries like India, Bangladesh and Sri Lanka. India has already announced plans to totally abolish MTR from January 2020.
A PTA consultation paper on Review of Mobile Termination Rates had termed the current rate 111-198 per cent higher in Pakistan than other countries. The paper had estimated that MTR should have been between Rs0.30-0.43 per minute.
The regulator had also suggested a reduced interim lower rate of Rs0.80 per minute between Dec 1, 2017 and Nov 30, 2018, and Rs0.70 per minute from this year’s December onwards until a cost-based study was done. But the suggested rates were never implemented.
Industry sources say the decrease in MTR will benefit consumers through a substantial reduction in off-net call prices and increase competition in the market as older, bigger operators will be forced to improve their service quality to retain customer base instead of using the advantage of their existing market share.
“Voice calls are still driving cellular connectivity in the country and contributing to the operators’ earnings despite a substantial increase in the companies’ revenues from data sales (ever since the launch of 3G/4G services). But higher MTR puts newer companies at a disadvantage vis-a-vis their older, larger competitors,” a cellular company executive told Dawn. “Currently, larger operators are benefitting from higher interconnect prices, which also keeps customers from switching to smaller companies. To give a level-playing field to every operator and offer each an opportunity to broaden base of customers on the basis of their service quality, it is necessary to bring down MTR.”
A PTA spokesperson told this reporter its consultation paper had proposed a gradual reduction with an initial reduction to Rs0.80 per minute in line with best international practices. “Pakistan’s telecom market is having one of the lowest ARPUs (average revenue per user) in the region and has intense competition among the operators, resulting in low prices for the users. The telecom policy requires a review of MTR in three years only if market conditions so require,” she said.
She said PTA had received comments from stakeholders on its consultation on MTR, and held hearings and further consultations on the matter. “PTA will issue its determination in due course of time,” she added, without specifying any timeline.
Published in Dawn, October 31st, 2018
