Local call tariff hike hits PTCL revenue -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Local call tariff hike hits PTCL revenue

KARACHI- The Pakistan Telecommunication Company Limited (PTCL) is alarmed at the fact that the number of local calls per subscriber per month is rapidly declining primarily because of the increase in tariff.

A report compiled by the Pakistan Telecommunication Authority says that it is a matter of concern that the number of local calls per subscriber per month is decreasing mainly due to a sharp increase in the tariff, such as monthly line rental was increased from Rs125 to Rs261 during the period from 1998 to 2002. “Similarly local call charges have also been increased from Rs1.4 to Rs2.01 over the same period excluding general sales tax. The steep rise in the monthly line rental has hurt the consumer affordability severely and tend to stifle the growth in the number of calls.”

The report also points out that despite a downward revision in tariff, the international outgoing traffic of the PTCL has failed to show a significant increase.

It says: “Based on the last 10 years data, minutes per subscriber have shown a dwindling trend and failed to keep the momentum with the network expansion. For the fiscal year 1999 the international outgoing traffic per subscriber was 40.65 minutes, compared to 31.34 minutes in 2002. For the year 2001-2002 international outgoing traffic contributed 6.33 per cent towards the total revenue. Minutes per subscriber have been hovering around 30-31 minutes for the past five years without showing any significant growth.”

However, the report says, the long-distance traffic has registered significant growth. It says: “The revenue growth rate of this segment surpassed the growth rate of the network expansion, mainly because of successive tariff rebalancing packages. The highest slab of the tariff was brought down from Rs21 per minute to Rs13.07 per minute over the period of 2000- 2002.

“Expansion in the network played a vital role in establishing a link between sizable numbers of bread-earners residing in cities with their immediate families living in remote areas. Thus, increase in network expansion coupled with sharp reduction in tariff had culminated in the revenue growth both in terms of rupees and volume. The share of the NWD (nation-wide dialling) revenue to total domestic revenue increased to 20.15 per cent in 2002 from 16.86 per cent in 2001.”

The report notes that the PTCL reported revenue of Rs66.4 billion in 2001-2002. “This represents an increase of 7.10 per cent with reference to the previous year, when the company’s revenue was Rs62.04 billion. The 7.10 per cent growth rate posted by the PTCL was lower than that of the latest five years’ average revenue growth rate of 10.3 per cent. The decline in the growth rate could be attributed to falling international settlement rates, expansion in low-income group areas and mobile cellular telephony.”

Speaking about the card payphone industry, the PTA report says that the first step in this direction was the installation of card payphones in 1992. “The growth was not substantial till 1998 when the PCOs were installed as outdoor booths. Later on, card payphone started as franchises as indoor booths. Since then a significant growth has been witnessed in the card payphone industry.

Source: Dawn