ISLAMABAD: The Telecom Operators Association (TOA) has raised concerns over a 300 per cent increase in the price of fibre broadband routers, warning that the hike contradicts the government’s Digital Pakistan Vision and could jeopardise the broadband expansion in the country.

In a letter to the Ministry of Information Technology and Telecommunications and the Federal Board of Revenue (FBR), the TOA argued that the valuation set by the customs department is unrealistic.

The association said that Valuation Order No. 1931/2024 issued by Pakistan Customs has raised the price of optical network terminals (ONTs) with RF (cable TV) ports from $50 to $165 per unit, while the rate for Wi-Fi-only ONTs has also increased from $27 to $44.

These ONTs are specialised networking devices used exclusively by fibre broadband operators like PTCL, Nayatel, Cybernet and Transworld, among others.

The telecom industry contends that the valuation ruling is arbitrary, ignores actual import invoices, and does not reflect real market prices. The TOA said ONTs are not locally manufactured and must be imported from vendors such as Huawei, ZTE and Fiberhome at standard global rates.

The association regretted that its submissions to the customs department had been ignored and an unreasonably high valuation had been imposed. To complicate matters, the customs department is incorrectly assigning separate prices based on Wi-Fi speed generations (Wi-Fi 4, 5, 6 and 7), despite no technical correlation between RF ports and Wi-Fi speeds, it added.

One TOA member said the high import cost would eventually lead to inflated internet equipment costs, thereby burdening broadband expansion efforts.

The telecom sector warns that such an arbitrary hike in ONT prices could directly affect broadband affordability for home users, hindering the country’s fibre-to-the-home (FTTH) development. This could stall broadband penetration, contradicting the government’s goal of expanding high-speed internet access across the country.

The TOA urged the IT ministry to address the issue with the FBR as soon as possible to ensure a fair, market-driven valuation. Industry stakeholders believe that the ministry, Pakistan Telecommunication Authority (PTA) and Pakistan Electronic Media Regulatory Authority should have been consulted in the valuation process to ensure informed decision-making.

The TOA called for a transparent valuation mechanism, recommending that customs’ valuations be based on actual import data from the past six months, with biannual reviews to prevent arbitrary pricing. It also demanded that customs provide clear documentation of the price determination process to enhance transparency and accountability.

Published in Dawn, January 17th, 2025