Dismal words by legislators can spoil 3G investment
KARACHI: While the government is eyeing heavy foreign investment against issuance of 3G licences, at this time such discouraging statements by senior legislators can destroy investors’ confidence, telecom officials said on Thursday.
Commenting on the latest statement of Federal Minister of Information and Broadcasting Parvaiz Rashid that chief executive officers of mobile companies should be put behind bars for selling illegal SIMs, a senior telecom official said that this statement is paramount to saying that the prime minister should be put behind bars for every theft, incidence of plundering and kidnapping in the country. He, while requesting anonymity, said that the telecom industry has been under siege from the government despite wanting the telecom companies to invest billions of dollars in the country against issuance of 3G licences.
He also dispelled Senator Talha Mahmood’s statement that mobile companies were paying zero income tax, saying that the relevant authorities must note that the telecom industry is one of the highly taxed sectors in the country and is the source of collection of the highest indirect taxes. Earlier, in the meeting of the Senate’s Standing Committee on Interior Affairs on Wednesday, Senator Mahmood’s said that mobile companies were paying zero income tax, claiming that they were running into losses. This may be partially true, as information received by this scribe confirms that most of the companies actually are not making any money as the overheads have increased over a 100 percent in the last few years over rising fuel costs, electricity shortfall, increasing rupee-dollar parity among other issues, he added.
Another industry player said that the latest news does not come at a good time for the new government and would shake investors’ confidence, especially of the CEO’s who bring foreign direct investment in the country, he added. He also criticised the government’s recent dishonourable move where the government diverted Rs 60 billion of revenue contribution that the telecom operators had placed under the Universal Services Fund of the Ministry of Information Technology (IT), towards the circular debt.
This fund had been placed under an agreement that the fund would be used for expansion of services in underserved areas and adoption of green technology in the country but the government without consulting any stakeholder utilised this hefty amount to clear circular debt, however, the energy crisis similarly persists like before, said the telecom official.
Although, the government is desperately seeking measures for the issuance of 3G licences, which will provide the much-needed impetus to the economy and is trying to build investors’ confidence by the recent appointment of PTA chairman and the announcement for a transparent method of hiring consultants for the 3G auction, something that the previous government failed to do despite numerous attempts. Industry experts were of the opinion that the government should be looking at more business-friendly practices, especially at a time when they are looking for foreign investors to bring more money into the country.
A senior industry analyst said that the government should be looking at ways to build confidence of the telecom operators and should seek out solutions to the problems with consultation with the industry, rather than banning things outright, as has become the norm.