PTA to begin lowering MTRs from start of next year

27 Nov 2018

The Pakistan Telecommunication Authority (PTA) is set to belatedly reduce the mobile termination rate (MTR) to PKR0.7 (USD0.0052) per minute over the next two years, Dawn reports. The PTA had conducted a review of MTRs in late 2017, following which it set out plans to lower the MTR to PKR0.8 from 1 December 2017 and to PKR0.7 from 1 December 2018 but the measures were not implemented at the time. The PTA’s study included a benchmarking analysis that compared Pakistan’s MTR regime to those of seven other countries – India, Bangladesh, Sri Lanka, Thailand, Malaysia, Australia and the UK – using mean and median purchasing power parity (PPP)-adjusted MTRs and found that Pakistan’s fees were 110% higher than the mean benchmark and 198% higher than the median. Based on the benchmarking analysis, the PTA proposed an MTR of between PKR0.30 and PKR0.43. An alternative comparison with the same countries that took into consideration relative ARPUs across the different markets suggested an even lower rate of PKR0.179 to PKR0.190.

As an interim measure, the PTA set out the glidepath to lower MTRs to PKR0.7 by 1 December 2018, with plans to conduct a full cost-based study at a later date. Implementation of the rate was reportedly delayed by opposition from market leader Jazz, however, and the regulator is now planning to lower the rate from its current level of PKR0.9 – which came into effect in 2010 – to PKR0.8 from 1 January 2019 and to PKR0.7 from 1 January 2020.