 Pakistan: Telecoms and technology background
FROM THE ECONOMIST INTELLIGENCE UNIT
The promulgation of the Telecom (Re-organisation) Act in 1996 laid the foundation for the rapid development of the telecommunications sector. The act permitted private investors to participate in the provision of new telecoms services. More recently, the government announced fixed-line and mobile-phone deregulation and established a quasi-independent regulator, the Pakistan Telecom Authority (PTA), to oversee the sector.
The government deregulated fixed lines in July 2003. Since then policy has permitted an open licensing regime with two main categories of licences: local loop and long-distance international dialling. Both have been granted for 20 years, with no restriction on the total number of licences. The PTA recently invited expressions of interest for fixed lines.
The first mobile-phone policy was formalised on January 28th 2004 and opened the way for the licensing of new mobile-phone operators through competitive auction bidding. The licence terms are currently 15 years and policy will be renewed every five years.
In January 2004 the cabinet formally approved a five-year programme to deregulate the sector. Licences for local-loop fixed-line communication within Pakistan and for long-distance and international fixed-line telecoms are being granted under an open and unrestricted policy without bidding. Licences for local-loop, long-distance and international calls will be given for 20 years on the deposit of a fee of US$10,000 for local services and US$500,000 for long-distance and international services.
The government has already deregulated and privatised selected telecoms services. There were four mobile-phone operators in the country by end-2002. In addition, there was one radio-paging company, 70 telex, facsimile and private automatic branch exchange (PABX) service providers, two manufacturers of large digital exchanges, 60 Internet service providers (ISPs), and more than 20 data network operators in the private sector, according to the US Foreign Commercial Service.
The PTA has so far issued three licences for basic fixed-line telephony. The PTA also awarded two new mobile-phone licences (however, one licensee failed to fulfil the required conditions of the licence and it was transferred to another consortium, Warid Telecom) including the Norwegian state-owned incumbent, Telenor. Across the sector, a total of 509 licences have been issued for card payment services, electronic information and other licences.
Telecoms development is a high priority for the government. The sector is currently being liberalised and has made significant strides. Most higher value added telecoms services are now open to competition, and private-sector efforts have been encouraging: mobile-phone services, card pay phones and Internet services have grown rapidly in recent years. Fixed-line telephony was a state monopoly until December 2002, dominated by the 88% state-owned Pakistan Telecommunications Company (PTCL).
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SOURCE: The Economist Intelligence Unit
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