LAHORE: The Pakistan Telecommunication Authority (PTA) has reduced mobile termination rate (MTR), the price which a cellular operator charges another operator for receiving a call, for all types of calls — local, long distance and international incoming calls — from the existing Rs0.90 per minute to Rs0.80 per minute from the start of next year.

The PTA’s decision will reduce off-net call prices of all operators and MTR will be brought down to Rs0.70 per minute from Jan 1, 2020.

The regulator has determined the rate after consultations with operators. The interconnect usage price was previously fixed in 2010.

A PTA consultation paper “Review of Mobile Termination Rates” has termed the existing MTR rate in Pakistan 111-198 per cent higher than other comparable countries last year. It suggested a reduced rate of Rs0.80 per minute for the period between Dec 1, 2017 and Nov 30, 2018, and Rs0.70 per minute from December onwards until a cost-based study was completed.

However, the suggested rates were never implemented.

During the ongoing consultations, almost every telco favored the proposed reduction in MTR of up to Rs0.70 per minute during the PTA consultations. The move was opposed by the country’s largest telco, Mobilink/Jazz, however, Telenor supported the change from next year onwards highlighting that the decision could hurt operators’ revenues.

On the other hand, Telenor also demanded a separate international termination rate of $0.025 per minute for both fixed and mobile calls.

The decrease in MTR will benefit consumers through a reduction in off-net call prices, 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 to rake in higher revenues.

Industry sources say the new MTR is still on the higher side. “The regulator, it appears, couldn’t withstand the pressure from the larger operators as a big portion of their revenues came from MTR. (Still) something is better than nothing,” an executive of a mobile operator said on condition of anonymity.

Published in Dawn, November 21st, 2018