ROLE OF PTA IN THE DEVELOPMENT
OF TELECOM SECTOR
VISION
Fair Regulatory Regime to Promote Investment ,
Encourage Competition, Protect Consumer Interest
and Ensure High Quality ICT Services
SEQUENCE
 PTA ORGANIZATION AND FUNCTIONS
 INDUSTRY SCENARIO
 INCETIVES TO THE INDUSTRY
 SECTOR LIBERALIZATION
 INDUSTRY PERFORMANCE
 TARIFF
 CHALLENGES
Perspective
 PTA was established under the Telecom (ReOrganization) Act 1996 To regulate telecom
system and services in Pakistan
Headquarters in Islamabad. Regional Offices
are in Karachi, Quetta, Lahore, Rawalpindi
and Peshawar
Autonomous Body
Organization
CHAIRMAN
MEMBER
(TECHNICAL)
COORDINATION
FINANCE
LAW
MEMBER
(FINANCE)
LICENSING
WIRELESS
LICENSING
WIRE LINE
INDUSTRY
DEVELOPMENT
ENFORCEMENT
FAB
COMMERCIAL
AFFAIRS
Functions
Regulate telecom systems and services through fair,
transparent and judicious regulatory framework
•
•
•
•
Issuance of licenses for various telecom services
Enforcement
Protect the interests of users and service providers
Investigate and adjudicate on complaints and other claims
Process applications for radio frequency spectrum
Promote modernization of telecommunication systems and
services
Make recommendations to the Federal Government on
policy matters
Telecom Scenario
2002
PTCL Monopoly on Fixed Line Telephony
Cellular Mobile Sector –Stagnant
Competition in Value Added Services
(Small Operators)
 Pay phones
 ISPs
 Cable TV
Low Tele Density
 Fixed
2.5
Total 3.5
 Mobile
1.0
Incentives to the Industry 2001
(Reduction in Fee / Royalty)
 Mobile phone
 ISPs
 Royalty on Equipment Sale
 License Fee
 ISPs in Balochistan
 Satellite Service
- From 4% to 1.5%
- From 4% to 0.66%
- From 5% to 0%
- 50%
- Fee & License Abolished
(Registration Only)
 Type Approval Fee
 Locally Manufactured Equipment - 50%
 Foreign Manufactured Equipment - 33%
Continue
Incentives to the Industry 2001
(Reduction in Fee / Royalty)
 PTCL Leased Line Charges - 30% Reduction in 2002
For Mobile Operators
- 17% Reduction in 2005
 PTCL Leased Line Charges - up to 39% Reduction in 2005
For LL & LDI Operators
 Activation Charges
For Mobile Phones
- Rs. 2000 to Rs. 500
 Advance Tax on Prepaid
Cards
- Rs. 125 to 45*
*on card value of Rs. 500
SECTOR LIBERALIZATION
Cellular Mobile New Licensing
Open Auction for Award of Licenses
-14 April 2004
( US $ 10 MILLION Earnest money)
Companies Participated in the Auction

Highest Bid
- 9
- US$ 291 Million
(Existing Licensees to pay the same fee)
WARID & TELENOR
WARID & TELENOR Serviceability
OPERATIONS
 Service Started
WARID
TELENOR
May 2005
March 2005
 Cities/ Towns Covered 28 (70 Jan 06)
3 (Now 160)
 No of BTs
536 (Now 617)
350 ( Now 1000)
Deregulation Policy
Open and Technology Neutral
License Term – 20 Years (Review after 5 Years)
License Categories
• Local Loop (LL)
• Long Distance & International (LDI)
Issuance of LL & LDI Licenses
Licenses Issued
• LL – 79
• LDI - 13
License Fee
• LL - US$ 10000
• LDI - US$ 500000
• (Performance Bond- US $10 MILLION)
Spectrum Auction for WLL
 Spectrum auctioned through open bidding – Aug 2004
 Spectrum allocated on regional basis
 Licenses Issued – 92
 Fee Collected – RS 14 Billion
NEW LICENSES
CMT
LDI
LL (Fixed)
WLL
2
13
79
92
Salient Regulatory Initiatives
 Determination on Interconnect
 Determination on Co-Location
 Determination on Limited Mobility
 SMP Status of PTCL and Mobilink
 Simplified VAS Licensing Regime
Many licenses condensed into only two
Some licenses replaced by registration
 Enabling environment for broadband penetration
INDUSTRY PERFORMANCE
Teledensity Growth
(fixed telephony)
Fixed Line Connections - 5,318,480
WLL Connections
- 4,17,349
4.00%
3.70%
3.17%
3.50%
3.00%
2.27%
2.18%
2.10%
1.99%
2.00% 1.85% 1.91%
2.50%
2.70%
2.50%
1.50%
1.00%
0.50%
0.00%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Major WLL Companies
•
•
•
•
•
•
PTCL
TELECARD
WORLD CALL
GREAT BEAR
DV COM
BURAQ
238,202
132,500
43,114
3,511
starting the service soon
starting the service soon
Cellular Mobile Growth
Penetration 12.7%
20,000,000
19598013
18,000,000
16,000,000
12,489,000
14,000,000
12,000,000
10,000,000
8,000,000
5,022,908
6,000,000
4,000,000
2,000,000
2,404,400
1,698,536
265,612 306,493 742,606
0
Jun 99
Jun-00 Jun-01
Jun-02
Jun-03
Jun-04
Jun-05 Nov\ Dec
2005
Cellular Mobile Sites Growth
7000
6500
6000
5000
4000
3000
2000
1000
1459
212
248
283
360
2000
2001
2002
2003
0
Years
2004
2005
Market Share of CMT Operators
Warid
Telenor 9%
Instaphone
2%
8%
PTML
23%
Paktel
5%
Mobilink
53%
Pay Phone Growth
Revenue to PTCL
(Approx. Rs.10 billion)
300000
281600
250000
200439
200000
127910
150000
97751
100000
66968
50000 10400
0
2000
2001
2002
2003
Years
2004
2005
Internet Subscriber
2500000
Users - Approx 10 million
Broadband Subscribers - 30,000
2000000
2100000
2000000
1600000
1500000
1000000
1000000
800000
500000
500000
0
2000
2001
2002
2003
2004
2005
REVENUE / INVESTMENT
License /Spectrum Fee
20
16,765
2004
2005
18
- RS 16,765 BILLION
- RS 12,257 BILLION
16
14
12
9,267
10
8
397
6
2,593
4
2
0
2004
2005
CMT
2005
WLL
2005
LL & LDI
Cellular Mobile Revenue
100
Rs. in billion
100
90
80
70
60
50
40
30
20
10
0
63.6
34.9
19.8
2002-03
2003-04
2004-05
2005-06
Estimated
GST/CED of Telecom Sector
25
20.4
Rs. Billion
20
15
11.5
8.8
10
5
0
12.1
FDI in Telecom Sector
(% of Total Contribution in Total FDI)
Total FDI – US $328.7MIL (July – Sept. 05)
FDI in Telecom - US $91.4 MIL(July – Sept. 05)
35.00%
32.40%
27.80%
30.00%
25.00%
21.80%
20.00%
15.00%
10.00%
5.00%
1.26%
1.69%
2002
2003
0.00%
2004
2005
July -Sept. 05
Investment Made by Major
Companies
COMPANY
Telenor (CMT)
Warid (CMT)
PTCL
World Call
TeleCard
DV Com
DanCom
Burraq Telecom
Redtone
Existing Mobile Operators
Total
EXPECTED INVESTMENT
(US $ Million)
400
392
273.3
115
165
38
12
21.5
38.2
645.5
2,100.5
TARIFF
Tariff Reduction of PTCL
Charges (Rs.)
Incl. of 15% GST
1996
2003
2004
2005
Connection
Charges
2500
Urban 1553
Rural 575
Urban 863
Rural 575
No
change
Line Rent
50
300
200
No
change
NWD Charges
42 / min
10 / min
6.04 / min
4.6 / min
74 / min
39 / min
23 / min
10.35 /
min*
International
Calls
* (Prepaid Card)
Long Distance Call Rates
Prepaid Calling Cards
Domestic Long
Distance (Rs.)
International
(Rs.)*
1.73 – 3.45
10.35
3.45
3.44
2.88
5.74
3.86 – 4.54
6.36
1.75
3.00
Burraq
1.71 – 3.09
4.59
Circlenet
2.04 – 3.05
3.98
Charges inclusive of
15% GST
Company
PTCL
World Call
DV Com
Callmate
Dancom
* International tariffs vary from country to country and for calls to Mobile networks in different countries
Local Call Rates - WLL
Company
Line Rent
Rs.
Same
Network
Other Networks
PTCL
174
2.01/ 5 min
2.01/ 5 min
Tele Card
149
0.40 / min
2.01/ 5 min
World Call
175
Free
0.85 / min
No Installation Charges
Tariff Reduction
Cellular Mobile
Charges
(Rs)
2000
2002
2004
2005
4.75 / min - Mobilink
Prepaid
Air Time
(On-net)
6.25 /
min
Postpaid
Air Time
(On-net)
1.99
5.75 /
min
5.00 / min - Ufone
1.5– 3.00/ min
3.75 / min - Paktel
1.50
1.00
0.75
Rs. 2.12 / min
Fixed line to
Local Mobile
3.20 /
min
2.80 /
min
2.80 / min
Rs. 1.77 / min
(July 06)
Roaming
Charges
5.0/min
6.0/min
Free since October
Free
Achievements
 Unprecedented Growth in Telecom Sector
 Tariff Significantly Reduced
 Substantial Investment Made
 Economic Growth
 Employment Opportunities
 Healthy Competition
 Successful Holding APT Meeting
 Significant Role in Earthquake Relief Efforts
 Heavy license fee collected for the Government
CHALLENGES
Mobile Number Portability
MNP Allows Users to Retain the Same Number
While Switching Over to Another Operator
Enhances Fair Competition
60% task completed
MNP regime will be implemented in first half of
2006
Rural Communication
 Many Options to Extend Telecom Facilities
(Use of WLL, VSAT, IP Technologies and
Cellular Mobile)
 Plan to establish Tele-Centers through
Micro Financing
 Implementation in consultations with local
Governments
Broadband
 High Speed (128 kbps & More) “Always On” Internet
Connection
 Broadband Access a Catalyst for Economic & Social
Development
 Broadband Penetration very low - 30,000 Approx
 Efforts in Hand to Enhance Penetration
 International connectivity will be enhanced soon
 Cost of Domestic Private Lease Circuits (DPLC) being
reviewed
 Creation of enabling environments
THANKS