Telcos slam govt for pegging licence renewal to dollar
ISLAMABAD: Key players in the telecom sector have criticised the government for pegging telecom licence renewal to the US dollar, describing it as the biggest threat to the information and communications technology industry, and demanded that the government revisit the policy if it wanted to realise the Digital Pakistan vision.
Besides forwarding their concerns to relevant government quarters, three out of four mobile telecom companies operating in the country also openly tweeted against official policies.
The heads of Jazz, Telenor Pakistan and Ufone have posted their concerns on Twitter over the supposed inaction of the government against ongoing economic crises that were hitting the IT and telecom sector.
Jazz CEO Aamir Ibrahim tweeted on Thursday that the rupee’s devaluation had jeopardised the business case for telecom companies, as telecom licence fees and interest on instalments were pegged to the US dollar.
“Last year, 50 per cent licence renewal fee cost us Rs44.5 billion, and this year, just 10pc instalment alone costs over Rs13bn,” he tweeted.
“Due to ongoing currency devaluation we’re unable to determine the amount we’ve to pay in instalment next year adding to uncertainty that no business plan can withstand. Sadly, wrong policy of pegging telecom license price to $ [dollar] pushing us” from digital emergency to digital catastrophe, he said.
Later, Hatem Bamatraf, chief executive office of PTCL Group, which owns Ufone, tweeted that with the constant rupee devaluation against the dollar, the cost of doing business had significantly increased in Pakistan.
“The expectation from telcos to invest heavily in infrastructure modernisation while earning in rupees is becoming detrimental to the dream of Digital Pakistan,” he said. “We must act now and devise a strategy for regulatory relief to avoid slowing down the digital development of the country.”
The Telenor Pakistan CEO also came out openly against the government policies.
In his tweet, Irfan Wahab said: “While the telecom industry generates its revenue in rupees, spectrum auctions, renewal and instalments are priced in dollars, exposing telcos to massive currency devaluation risk.”
Mr Wahab added, “Need to fix this mismatch before telcos capacity to further power digital transformation gets irrevocably depleted.”
Published in Dawn, February 3rd,2023