Pakistan’s Liberalization in Telecommunication

From Wikipedia, the free encyclopedia

This article or section is written like a personal reflection or essay and may require cleanup.
Please help improve it by rewriting it in an encyclopedic style. (December 2007)

This article needs additional citations for verification.
Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (July 2007)

For many years Pakistan telecommunications sector was monopolized by the state owned company named PTCL (Pakistan Telecommunication Limited). The Pakistan Telecommunications Act (PTA) 1996 formed PTCL and gave it the monopoly over others.

Consequences of this were that local call rates were high and international calling was extra-ordinarily high. During the 90’s call to US would cost $5 per minute (300PkRs per minute) which was not affordable for a large portion of the population. Apart from having high call rates, customer service was poor. During those times fixing a problem might took 10 to 15 days. Despite of all this, consumers had to stick with PTCL as they had no options available.

This prompted the government to take immediate actions over this in order to improve the service. This decision was a critical one because fine balance was required in opening of market and preserving PTCL as it is considered one of the national assets.

In July 2003 government introduced a Telecommunications De-regulation Law. This allowed and encouraged the foreign companies to invest in the market. “The centerpiece of the De-regulation Law is the establishment of two new categories of basic services licenses: Local loop (LL), for fixed line telecommunication within the 14 PTCL regions, and Long-distance and International (LDI), for connectivity between regions.”.

There are certain criteria set by the regulatory authorities before allowing an operator to start its operation. There are two criteria, one for the issuance of a license and other for the maintenance of Quality of Service.

[edit] Growth in the Mobile Market

Over the last few years Pakistan stands out as a lucrative market in the mobile communications. It showed great potential for the operators. There are six operators that are operating in Pakistan, which includes Mobilink, Ufone, Telenor, Paktel, Warid and Instaphone. Among them, Mobilink has the most subscribers. There are more than 48.5 million subscribers and to which 2.7 million subscribers are added per month. This growth is due to the competitive environment that the free market economy offers. This increase of competition has greatly increased the standard of service.