Government to grant telecom licences to private companies -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Government to grant telecom licences to private companies

ISLAMABAD- Pakistan is planning to grant licences to the telecommunication companies in the private sector, officials said. This move will break the decades-old monopoly of state-run Pakistan Telecommunication Company Limited (PTCL) much before 2003 as agreed under the World Trade Organisation (WTO) commitments, said an official speaking on condition of anonymity.

Under the WTO regulations, Islamabad is required to provide a level-playing field to the private sector and international telecommunication companies by removing all restrictions and special privileges to the state-owned telecom utility by 2003. “At least one or two licences are expected to be given to the multinationals within the next couple of months…perhaps before the close of current calendar year. This could really create tremendous competition and generate revenue,” said a source. The government could earn more money by awarding new licences to the private sector than through the PTCL privatisation in the given circumstances and national assets would also remain within its hands. The sources argued that the telecom technology has witnessed so much progress and innovation in recent years that even a landline set-up such as that of PTCL is not required. These systems are also cost-effective as compared to landline telecom system, which requires continuous maintenance.

The government is already in contact with some multinational companies in this regard. Idatel Networks of the United States last week offered to invest in Pakistan. This new phenomenon has emerged in the official circles because of depressed market conditions and the policymakers have started rethinking the privatisation plan of the telecoms sector. Some quarters are convinced that a national institution like PTCI should not be handed to foreigners. A majority of people, including some in the Privatisation Commission, believes Pakistan has already lost the opportunity of selling PTCL in mid-90s. They claim it could have fetched maximum price if privatised a couple of years back. They also justify the new proposal by saying the main objective of privatisation is to change work culture and improve performance of the public sector which has already been achieved in the PTCL. “The PTCL is now working purely on commercial lines and it has maintained a steady expansion both in revenue and operations. This demands the utility should be allowed to flourish and contribute to the national exchequer instead of selling it just for the sake of privatisation at throwaway prices,” said a senior government official. The head of the Privatisation Commission M Salim Altaf said the value of the PTCL has depreciated manifold due to changed market environment despite a lot of improvement in its performance.

PTCL Chairman Nasim S Mirza, in an interview said the PTCL was working with a French consultant to implement its recommendations, which cover over 10 work packages including billing, network access, marketing, customer care, optimal utilisation of network etc. “In this regard a special team has been set up to restructure the company. The reason is that in case the strategic investor does not come or privatisation does not take place, the company has to change even more … dramatically even further to face competition in 2003,” he said.
Source: The News
Date:4/12/2000