ISLAMABAD, March 24: The GSM Association, the global trade association for mobile phone operators, on Saturday urged the government to eliminate the Rs500 activation tax paid by consumers and the industry to connect every new mobile user in the country.

The announcement came at a press conference which was the result of a meeting between top officials of cellular phone operators, representatives of GSMA and Prime Minister Shaukat Aziz.

GSMA Chief Executive Officer Rob Conway, who was representing Mobilink, Paktel, Telenor Pakistan, Ufone and Warid, said that the activation tax was unusual. “Nowhere in the world is this kind of tax being charged. It affects consumers because of the higher price they pay”.

A cut in taxes on mobile communications could boost mobile usage and fuel economic growth while increasing overall tax revenues, he said.

“With 50 million mobile users and 30 per cent penetration, Pakistan is now a leader in mobile usage in South Asia. The next step is to build on that achievement by eliminating the activation tax and securing further economic and social benefits for the people," Rob Conway said.

Mr Conway informed that mobile industry contributed five per cent to Pakistan’s gross domestic product. For every 10 per cent of additional penetration, contribution to the GDP would increase by 1.2 per cent, he added.

GSMA also released the preliminary results of a study which estimated that the mobile industry had created 220,000 high-paying jobs in Pakistan. The study also found that Pakistan’s economy and society were benefiting from rising mobile phone usage, lowering costs of doing business and improving productivity while helping families and friends to connect to each other at home and abroad.

According to a statement issued here, Prime Minister Shaukat Aziz during the meeting said that the telecom was one of the fastest growing sectors of the country. The combined teledensity had increased from 4.5 per cent two years ago to about 40 per cent of the population.

As the number of subscribers of fixed and mobile telephony grew, the PM said that the market had a potential to reach 80 million in two to three years.

The PM said that Pakistan had become a hub of activity for international and local telecom companies and unprecedented amount of foreign investment flowed into the sector due the well-thought telecom policy.

Assuring all possible assistance, the PM said that the government looked forward to working further with cell phone service providers and investors to improve information and communication services in Pakistan and drive economic development.