Cellular subscribers decreasing in Pakistan

According to the Pakistan Telecommunication Authority (PTA) statistics the number of cellular subscribers in the country fell by 0.46 million to 183.48 million by end May 2021 as against to 183.94 million by end April. It may be mentioned here that a substantial number of Pakistanis even now are dependent on 2G phones for everyday use, with only 99 million using 3G/4G services with 1-2 million fixed-line internet connections. PTA also recorded that Teledensity for cellular mobile also fell from 84.11 percent by end April to 83.85 percent by end May. The total teledensity fell from 85.25 percent by end April to 84.99 percent by end May 2021. It is also recorded that the number of 3G and 4G users in Pakistan stood 98.66 million by end May 2021 as against to 96.52 million by end April 2021, recording a rise of 0.14 million.

Monthly Next Generation Mobile Service (NGMS) penetration reached at 45.09 percent in May 2021 as against to 45.05 percent in April 2021. Furthermore, the PTA received 15,533 complaints from telecom consumers against various telecom operators as of May 2021. Statistics released by PTA also showed that it was able to get 15,407 complaints resolved i.e. 99 percent. Cellular mobile subscribers constitute major part of overall telecom subscriber base, therefore, maximum number of complaints belong to this segment. The total number of complaints against CMOs by May stood at 15,039.In general; telecom taxes are irrationally high in Pakistan as there is a 19.5 percent GST, the highest slab of GSTs in Pakistan and a 10 percent withholding tax. PTA statistics also identified that the telecom industry paid Rs 125 billion to the national exchequer in terms of taxes, duties and levies during the fiscal year 2019-20. On the other hand, the Government of Pakistan proclaimed a new 75 paisa tax on mobile calls over five-minute duration. The announcement has perplexed the telecom sector and experts. As a result the experts of the telecom industry said that the imposition of a new tax of 75 paisa on every 5-minute on cellular call will be almost 38 percent additional tax on the telecom consumer. Presently, a 5-minute long voice call usually costs almost Rs 1.97 and after adding new Re 0.75 tax, the same call will now cost Rs 2.72. Per minute cellular cost is 33 paisa and five minutes call charges are Rs 1.65 excluding taxes. After adding 32 paisa, the five minutes call cost is Rs 1.97, however after the imposition of new tax, its cost will stand Rs 2.72 per five minutes call.

Sources recorded that this new tax imposition comes after the government of Pakistan had already taken back its previous announcement regarding new taxes for the use of internet, SMS, and phone calls exceeding 3 minutes. The announcement has also caused confusion among the various segments of the society, which everyday dealings are dependent on phone and internet connectivity. No doubt the new tax is being imposed without any consultation with the industry experts and there was even no consideration whether it would be practically possible to implement it and how it will affect the lowest segment of society who rely on voice calls to stay connected with their loved ones. Industry expert also recorded that the federal government of Pakistan for reversal of this ‘anti-poor’ tax. As per the telecom industry, the implementation of this proposed tax is very tough as the charging structure is not linear and is based on bundle offers to facilitate prepaid users which account for 98 percent of overall cellular subscribers in the country. This regressive move will play havoc with the prepaid bundles being enjoyed through the lowest segment of society as the cellular operators will be constrained to remove such offers, making voice calling significantly more expensive. In addition, users will quickly learn to redial before 5 minutes to defeat this proposed levy hence it may bring nothing to the government of Pakistan but add to the complexity for the telecom sector and operators while causing massive inconvenience to the citizens.

According to industry experts, this extra tax will also hit the poor who can’t afford smartphones or internet connectivity in the country. This mostly includes laborers and local domestic workers who move to larger cities from their villages, leaving their families behind in search of better paying working opportunities, and will now face difficulty affording basic phone calls back home. Industry experts hope that this questionable tax doesn’t necessarily encourage a digital future for the country. Sources also recorded that a better way is to raise mobile broadband and smartphone penetration so millions can come online and in return, the present government of Pakistan can reap the socio-economic benefits brought upon through increased usage. The taxes and fees on mobile consumers and operators in the country are already among the highest in globally and any additional levy on telecom services would be detrimental to Pakistan’s journey towards digitalization.

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