role of pta in the development of telecom sector vision fair regulatory regime to promote...
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ROLE OF PTA IN THE DEVELOPMENT OF TELECOM SECTOR
VISIONVISION
Fair Regulatory Regime to Promote Investment , Fair Regulatory Regime to Promote Investment ,
Encourage Competition, Protect Consumer Interest Encourage Competition, Protect Consumer Interest
and Ensure High Quality ICT Servicesand 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 (Re-
Organization) 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
MEMBER(TECHNICAL)
MEMBER(FINANCE)
CHAIRMAN
FINANCE
LAW
LICENSING WIRE LINE
LICENSING WIRELESS
ENFORCEMENT
INDUSTRY DEVELOPMENT
COMMERCIAL AFFAIRS
FABCOORDINATION
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
Functions
Telecom Scenario2002
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 Mobile 1.0 Total 3.5
Incentives to the Industry 2001(Reduction in Fee / Royalty)
Mobile phone - From 4% to 1.5% ISPs - From 4% to 0.66% Royalty on Equipment Sale - From 5% to 0% License Fee
ISPs in Balochistan - 50% Satellite Service - 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 - Rs. 2000 to Rs. 500
For Mobile Phones
Advance Tax on Prepaid - Rs. 125 to 45*Cards
*on card value of Rs. 500
Open Auction for Award of Licenses -14 April 2004
( US $ 10 MILLION Earnest money)
Companies Participated in the Auction - 9
Highest Bid - US$ 291 Million
(Existing Licensees to pay the same fee)
WARID & TELENOR
Cellular Mobile New Licensing
WARID & TELENOR Serviceability
OPERATIONS WARID TELENOR
Service Started 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)
Licenses Issued
License Fee
• LL - US$ 10000
• LDI - US$ 500000
• (Performance Bond- US $10 MILLION)
Issuance of LL & LDI Licenses
• LL – 79
• LDI - 13
Spectrum auctioned through open bidding – Aug 2004
Spectrum allocated on regional basis
Licenses Issued – 92
Fee Collected – RS 14 Billion
Spectrum Auction for WLL
Salient Regulatory Initiatives
Determination on Interconnect
Determination on Co-Location
Determination on Limited Mobility
SMP Status of PTCL and Mobilink
Simplified VAS Licensing RegimeMany licenses condensed into only twoSome licenses replaced by registration Enabling environment for broadband penetration
Teledensity Growth(fixed telephony)
1.85%1.91%1.99%2.10%2.18%2.27%2.50%
2.70%
3.17%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
1996 1997 1998 1999 2000 2001 2002 2003 2004
Fixed Line Connections - 5,318,480Fixed Line Connections - 5,318,480WLL Connections - 4,17,349WLL Connections - 4,17,349
3.70%
2005
Major WLL Companies
• PTCL 238,202• TELECARD 132,500• WORLD CALL 43,114• GREAT BEAR 3,511• DV COM starting the service soon• BURAQ starting the service soon
265,612 306,493 742,6061,698,536
2,404,400
5,022,908
12,489,000
19598013
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
Jun 99 Jun-01 Jun-03 Jun-05
Cellular Mobile GrowthPenetration 12.7%
Jun-00 Jun-02 Jun-04 Nov\ Dec 2005
212 248 283 360
1459
6500
0
1000
2000
3000
4000
5000
6000
7000
2000 2001 2002 2003 2004 2005
Years
Cellular Mobile Sites Growth
10400
6696897751
127910
200439
281600
0
50000
100000
150000
200000
250000
300000
2000 2001 2002 2003 2004 2005
Years
Revenue to PTCL(Approx. Rs.10 billion)
Pay Phone Growth
500000
800000
1000000
1600000
20000002100000
0
500000
1000000
1500000
2000000
2500000
2000 2001 2002 2003 2004 2005
Users - Approx 10 millionBroadband Subscribers - 30,000
Internet Subscriber
License /Spectrum Fee
16,765
397
0
2
4
6
8
10
12
14
16
18
20
CMT WLL LL & LDI
2004 2005 2005 2005
2,593
9,267
2004 - RS 16,765 BILLION 2005 - RS 12,257 BILLION
Cellular Mobile Revenue
19.8
34.9
63.6
100
0
10
20
30
40
50
60
70
80
90
100
Rs.
in b
illio
n
2002-03 2003-04 2004-05 2005-06Estimated
GST/CED of Telecom Sector
8.8
11.512.1
20.4
0
5
10
15
20
25
Rs.
Bill
ion
2001-02 2002-03 2003-04 2004-2005
1.26% 1.69%
21.80%
32.40%
27.80%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2002 2003 2004 2005 July -Sept. 05
Total FDI – US $328.7MIL (July – Sept. 05)FDI in Telecom - US $91.4 MIL(July – Sept. 05)
FDI in Telecom Sector(% of Total Contribution in Total FDI)
Investment Made by Major Companies
COMPANY EXPECTED INVESTMENT
(US $ Million)
Telenor (CMT) 400
Warid (CMT)Warid (CMT) 392392 PTCL 273.3
World Call World Call 115115 TeleCard 165 DV Com DV Com 3838 DanCom 12
Burraq Telecom Burraq Telecom 21.521.5
Redtone 38.2
Existing Mobile OperatorsExisting Mobile Operators 645.5645.5
Total 2,100.5
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 200No change
NWD Charges 42 / min 10 / min 6.04 / min 4.6 / min
International Calls
* (Prepaid Card)
74 / min 39 / min 23 / min10.35 / min*
Charges inclusive of 15% GSTCompany
Domestic Long Distance (Rs.)
International(Rs.)*
PTCL 1.73 – 3.45 10.35
World Call 3.45 3.44
DV Com 2.88 5.74
Callmate 3.86 – 4.54 6.36
Dancom 1.75 3.00
Burraq 1.71 – 3.09 4.59
Circlenet 2.04 – 3.05 3.98* International tariffs vary from country to country and for calls to Mobile networks in different countries
Long Distance Call Rates Prepaid Calling Cards
Local Call Rates - WLL
CompanyLine Rent
Rs.Same
NetworkOther 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 ReductionCellular Mobile
Charges (Rs)
2000 2002 2004 2005
Prepaid Air Time (On-net)
6.25 / min
5.75 / min
4.75 / min - Mobilink
5.00 / min - Ufone
3.75 / min - Paktel
1.5– 3.00/ min
PostpaidAir Time (On-net)
1.99 1.50 1.00 0.75
Fixed line to Local Mobile
3.20 / min
2.80 / min
2.80 / min
Rs. 2.12 / 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
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
Mobile Number Portability
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
Rural Communication
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
Broadband