PTA Explains How Increased ASR Helped the Industry

Pakistan Telecommunication Authority has denied the reported loss of Rs. 30 billion per year, as claimed by a report appeared in The Dawn yesterday.
PTA in an official statement said that increased approved settlement rates or ASR has resulted positively for funds collected for Universal Service Fund (USF). PTA in its statement said that increased ASR helped broadband enrichment in the country along with many other projects that are running on the shoulders of ASR.
PTA has said that its decision of increasing ASR is appeal-able in the court, thus anyone having any reservations can challenge authority’s decision.
PTA further maintained that international incoming traffic was not impacted due to hike in ASR, however, PTA didn’t mention the stats of illegal traffic during the years.
Following is the complete press release issued by the authority.

The increases in Approved Settlement Rates (ASR) are made on the basis that the level of ASR directly affects the contributions towards USF for proliferation of telecom services and the same was increased to help the Government to expand the USF projects in remote areas.
Number of projects has lately been completed by USF Fund in Sindh and Balochistan. Five Optical Fibre projects costing Rs. 4.5 Billion and Twelve Broadband projects costing Rs. 6.35 Billion have already been awarded.
Owing to this, the broadband proliferation has increased manifold in Pakistan showing a growth of 150%, thus putting Pakistan amongst the top ten countries in the world in terms of growth. The broadband subscribers have reached approximately 0.8 Million. Therefore as reported in certain section of the media, government has not suffered a loss of Rs 30 billion on account of collection of Access Promotion Contribution (APC).
On account of APC for USF, PTA was collecting:

• Rs.12 million/month in January, 2005
• Rs.85 million in October, 2007
• Rs.86 million in May, 2008
• Rs.1083 million/month in Feb 2009
• Rs.1564 million/month in Feb, July, 2009

In fact, as data shows, changes in the APC and ASR over the period of time have helped in increase of revenues to the USF Fund.
Historically, when ASR was at its minimum level from October 2007-April 2008, the average monthly minutes were 499 Million per month. In May 2008, when the ASR was increased to 10 cents/minute, there was no negative impact on the traffic pattern due to the installation of equipment to curb grey traffic.
From May 2008 onwards, average incoming traffic remained at 500 plus Million minutes per month, resulting in an increase in APC for USF contribution of US$ 14 Million per month (May 2008-Jan 2009) which further increased to US$ 22 Million per month from February 2009 to June 2009 when PTA increased the ASR to 12.5 cents/minute.
Since the reported traffic never reached to the level of one billion minutes per month even when ASR was at its minimum level, the assumption that the legal traffic fell below 400 Million minutes per month, thereby resulting in a loss of Rs 30 Billion, as being projected in the media, is not based on facts.
Another reason for increase in ASR is that the earlier reductions in ASR were not passed on to the end users by foreign operators who continued to charge high tariffs from users calling Pakistan from abroad and the same was conveyed to PTA through complaints from Pakistani expatriates.
The Telecom Act 1996 and APC Regulations empower PTA to revise ASR/APC which PTA carries out after the due consultation with telecom operators through a fair and transparent method. And the decision of PTA is appealable in the courts as well.
PTA conducted 28 successful raids, on grey traffickers, since March 2009, which included small and big gateway operators. Number of persons including foreigners were also apprehended. In the campaign against illegal telephony 20,092 mobile SIMs were blocked. Furthermore, licenses of Local Loop operators and LDI operators were suspended, while LDI operators were also fined on this account. Thousands of operators/equipments involved into grey traffic are being blocked every month. PTA has saved Rs.1.5 billion (US$ 18 Million per month) so far by taking action against the illegal operators and after installation of latest equipment in April 2008 at PTA.
It is pertinent to mention here that PTA has established a dedicated Vigilance Cell of experts whose expertise are well recognized in monitoring such illegal telecom traffic with the help of state-of-the-art equipment to curb the grey traffic. International regulators have shown their interest to acquire similar system to curb grey traffic in their respective jurisdictions.