Pakistan’s Battle of Bandwidth Rates

Posted on October 3, 2006
Filed Under >Babar Bhatti, Economy & Development, Science and Technology
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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.

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

  1. PakiNetizen says:

    I believe this is still being worked on and no decisions have been made yet.

  2. Abrar says:

    Does anyone have a sense of how this issue was finally resolved… or has it not been resolved yet

  3. Babar says:

    Umair – I wish PTCL every success. PTCL is vital to Pakistan’s economy. I only want them to fix their policies and attitudes. PTCL has virtual monopoly over Internet access and pricing. That has to change.

    By the way same kind of changes happened in many other countries which went through deregulation. In US AT&T is an example. The smarter Baby Bells survived and those who could not compete were swallowed up by others.

  4. Babar says:

    Daktar, the rates for long distance and international calls did come down due to the deregulation. PTCL was forced to do it as it was losing market share to competitors. Now its time to force PTCL to reduce internent access rates as well. For reductoin in call rates see: shes-rates-for-calls/

  5. Farrukh says:

    Must commend the PTA on this. That is the job of the regulatory authority. Oversight and monitoring. I hope they will keep pushing on this and not let this Arab multinational steal away the benefits of the rate decrease by the government.

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