ISLAMABAD: The Pak­istan Telecommunication Authority (PTA) has reduced the mobile termination rate (MTR) from Rs0.70 per minute to Rs0.50 with effect from Jan 1, 2022, an official statement said on Friday.

MTR — the price a cellular operator charges from another operator for terminating off-net calls — will be further reduced to Rs0.40 per minute from July 1 next year, the telecom regulator said.

According to PTA officials, the reduction in MTR will directly or indirectly benefit callers in that it will offer more flexibility to operators to introduce new bundles for consumers.

While the PTA claims that the decision has been made after thorough consultation with the telecom industry, some industry players have opposed the move. They argue that the reduction would affect the telecom industry’s efforts to improve the quality of service and coverage across the country, causing a potential loss of around Rs8-10 billion to the industry.

“The callers are not aware of wholesale termination charges which are settled among the operators. Higher termination charges tend to favour larger players as compared to smaller operators,” a PTA official said, adding that it was the regulator’s responsibility to provide a level playing field.

The PTA believes that lowering MTR would allow more competitive and innovative offerings, such as free off-net minute bundles, for consumers. Besides, it is expected to make the market healthier and beneficial in terms of lower tariffs on off-net calls.

In July, the PTA issued a consultation paper in which it noted that an MTR of Rs0.70 per minute in Pakistan was still higher than the benchmarking results of the MTR determination of 2018 and the MTRs prevailing in regional countries.

The regulator said it had also received requests from telecom operators to review the existing mobile termination rates.

After industry hearing and thorough analysis, the PTA has determined the MTR for all types of calls — including local, long distance, and international incoming calls — terminated on mobile networks from other mobile networks or fixed networks in Pakistan, Azad Jammu and Kashmir and Gilgit-Baltistan, to be Rs0.50 per minute from January to June 2022, Re0.40 per minute from July 2022 to June 2023, and Rs0.30 per minute from July 2023 onwards.

On the other hand, those who opposed the reduction in MTR maintain that the rate in Pakistan was already among the lowest in the world.

One industry player feared that lowering MTR will further deflate the telecom market amid record inflation and currency devaluation.

Published in Dawn, November 27th, 2021