Pakistan’s Battle of Bandwidth Rates

Posted on October 3, 2006
Filed Under >Babar Bhatti, Economy & Development, Science and Technology
15 Comments
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Guest Post by Babar Bhatti

With some luck the Pakistani Internet user base may get a long overdue and much deserved break. That is, if the recent bandwidth rate cuts proposed by PTA are implemented and that’s where the battle is. Here’s a bit of history of the PTA vs. PTCL bandwidth rates controversy.

PTA is the Pakistan Telecommunication Authority, the autonomous regulatory agency; and PTCL is the, now privatised and run by Etisalat, Pakistan Telecommunication Corporation Limited, the leading telecommuinication provider in the country. (See earlier ATP Post on foriegn interest in Pakistan’s telecom sector).

In an effort to accelerate the spread of broadband services in Pakistan, PTA cut bandwidth rates significantly in June and asked PTCL to apply the new tariff rates. This decision was based on a policy paper (PDF version here) by PTA in April – which concluded that lack of competition and high international bandwidth rates are harming consumers and businesses.

The drastic reduction in bandwidth rates created a chain of events. Instead of complying with the PTA decision, the Etisalatrun PTCL took the legal course. In August, the Lahore High Court reversed the PTA decision on reduced bandwidth rates. In essence, then, the consumers have not yet recieved the benefit of the rate cut by PTA.

The chart (taken from PTA paper referred above) shows the comparison of domestic leased circuit tariffs between India and Pakistan.

As reported by the Pakcdma site:

Based on the LHC verdict, the PTA has called the LDIs, ISPs, software companies’ representatives and PTCL for a review meeting on its determination. In its August 7 decision, the LHC gave the regulator 60 days to reach a fresh plan of bandwidth rate cut, which has been long over due for the Pakistani market. The PTA was also directed to adopt the proper procedure for price determination by asking parties to submit and exchange their respective cases; holding a formal hearing; and issue fresh determination this time avoiding the pitfalls.

Read the PTCL response here. PTCL argued that the tariffs should be based on cost criteria.

Whatever the results may be, at least there is a process and some progress. Let’s hope for the best!

Babar Bhatti is a Telecom professional based in Dallas, Texas. See more at Babar’s blog: State of Telecom Industry in Pakistan.

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15 responses to “Pakistan’s Battle of Bandwidth Rates”

  1. aslam says:

    this sale of PTCL was a selling junk to innocent eitisalat, the fact is that with the new technologies like WLL and VOIP the existing structure was already obsolete, and just mere junk, rubbish, and scrap, the exchanges were scrap,, tha lines were no use over used, dirty mess, PTCL was a big ugly junk yard,
    they have put this dirty mess in eitesalats neck,

    the VOIP and WLL is far much advanced and easy to use , mainntain , establish, and at fraction of the cost of current set up, so instead of throwing this junk in to gutter they cleverly put it into someone elses pocket,

    the disadvantage is that ultimately people will have to pay for it all, eiteslat will manage to get out what it has spent, governement has sold tha junk,

    but people will suffer becaus this will delay the VOIP and WLL , these things should have been widely installed by now and in common use, but government and eitisalat will delay them till they eat to their full tummy,

    the ptcl was a institution which was made to serve public,
    but what happened was that public was made to suffer for the intrests of the instition of ptcl.

    ptcl never allowed private internet companies to establish, they always boosed the isps, all isps have to buy form ptcl,

    if tata or other international companies were allowed we would be on fiber optic 10mb per second connection,

  2. Barkan Saeed says:

    Just read the news that PTCL stay has been cancalled by the high court..

    Any ideas on what the new tarrifs are going to be ??

  3. Babar Bhatti says:

    The battle goes on. This just in: The Lahore High Court (Rawalpindi bench) has granted PTCL stay against the Pakistan Telecommunication Authority’s decision to reduce bandwidth prices after an Etisalat-run company challenged the determination for the second time. See:
    http://www.thenews.com.pk/daily_detail.asp?id=3421 7

  4. Asif says:

    I am not sure what the big deal is. We have now privatised the company. Lets stop interfering in their work. Why should they not make a profit. This is not communism!

  5. HS says:

    This is not about free market or anything. The goevrnment reddices teh rates for teh expliccit purpsoe taht the savings are passed on to teh customer. BUt they were not. That is what this is all about.

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