ISLAMABAD: The telecom industry is divided over the launch of 5G network services in the country next year, with one mobile service provider willing for the upgrade while the other three wondering how the industry can commit more investments “when its very survival is at stake”.

IT Minister Syed Aminul Haque has met the heads of four mobile cellular companies over the past two days.

He called on Jazz, Telenor and Ufone CEOs to his office on Thursday and tried to address their concerns, including the industry’s poor financial health, increasing cost of business, and government’s inconsistent policies, among a host of other issues.

The meeting came a day after the minister met Zong CEO Wang Hua, who had assured Mr Haque that the China Mobile-owned company would fully cooperate with the IT ministry for the 5G rollout in Pakistan.

Meets CEOs to address concerns; three players say investors wary of current business climate

In Thursday’s meeting, the IT and telecom minister assured the three telco heads that the government was aware of issues faced by the telecom industry and efforts were under way to address them.

He said the government was determined to remove all bottlenecks at the departmental level to promote investment in the IT and telecom sector.

“The improvement in connectivity was linked to the telecom industry, and I am convinced that the economic stability of the country was linked with a strong and vibrant telecom industry,” Mr Haque said.

The minister and the CEOs agreed that a healthy and stable telecom sector was the foundation of a country’s digital ecosystem.

The telco executives expressed concern over the lack of consistent government policies that they said was making it difficult for the companies to convince their investors of more investment potential in Pakistan.

They also lamented the rising cost of doing business, particularly fuelled by a weak rupee and a hike in fuel and electricity prices and interest rates. They also complained that the government had pegged spectrum prices to the dollar when these companies were earning in rupees.

On the launch of 5G within 12 months, they stressed that the recent floods had severely damaged critical telecom infrastructure and even threatened the survival of the country’s telecom sector.

“To mitigate the ‘digital emergency’ like situation in Pakistan, urgent policy interventions from the government were needed to provide critically needed fiscal space to the telecom sector and support Pakistan’s digital inclusion objectives,” one CEO told the minister.

Another head of the telecom company suggested that the government should denominate spectrum payments in rupee terms and extend the payment terms to 10 years instead of five years, while there was a need to suspend the industry’s annual contribution to the Universal Service Fund and Ignite fund for two years.

All three industry players also demanded a reduction in withholding tax from 15pc to 8pc on essential telecom services.

Published in Dawn, November 18th, 2022