Tuesday, October 4, 2022

Telcos ask govt to waive Rs. 10 billion in USF for 2 years

The Telcos industry has asked the govt to stop giving about Rs.10 billion to the Universal Service Fund (USF). The research and development fund for the next two years (Ignite).

This work is occurring because the exponential rise in business costs in the current economy has caused a “digital emergency.” The telecom industry has asked the federal govt to give more money to the sector through the Ministry of Information and Communications Technology (MoITT).

The govt can make policies that are specific to each industry to make more space without breaking the bank. Industry leaders have asked the govt to make a number of changes. The most important of which is a two-year freeze on the sector’s contribution of about Rs.10 billion to the Universal Service Budget (USF). And 0.5 percent to the R&D budget (Ignite).

People in the know say that the Federal Consolidated Fund (FCF) has always had a balance of about Rs. 55 billion from these sources. The MoITT’s Non-Lapsable Personal Ledger Account provides a large amount of funding each year (PLA).

The telecom industry says that the available funds are enough to keep doing what they are doing for the next two years. Operators are sure that the USF can go back to normal if the fund runs out. While the temporary stoppage is happening.

USF was set up in 2007 with the goal of giving places that didn’t have access to communication technologies. Like cell phones, broadband internet, fiber optics, and more. The telecommunications industry as a whole gives 1.5% of its annual income to the United States Football Foundation.

Some parts of Balochistan and the merged districts of Khyber-Pakhtunkhwa still don’t have access to basic telephone and mobile broadband services. Even though the USF has spent around Rs. 100 billion to bring cellular, broadband internet, fiber optics, and other telecommunication services to un-served or under-served areas.

The law says that the Pakistani government has the power to change these payments. This break may cause USF to change how it spends money over the next 18 months, but it won’t stop the growth of the fund in any way.

So that they can keep serving their more than 195 million customers, telecom companies have suggested an emergency stimulus package. It would include things like stopping the contribution of funds. Spreading licensing fees out over 10 annual payments instead of 5.

At a recent meeting of the telecom subcommittee of the Prime Minister’s advisory council for the information technology and digital economy. It was said that when earnings in Pakistani rupees are converted to US dollars. Foreign investors see negative growth because spectrum installment payments are going up.

Even though telecom companies have invested $3.2 billion in the last five years. The panel says that their future is in danger because the cost of doing business in Pakistan is going up at an exponential rate. Over the past year, inflation has caused fuel prices to rise by 116%, electricity prices to rise by 49%, interest rates to rise by 68%, and the exchange rate between currencies to rise by 42%.

Read more: Amazon closes over 13,000 Pakistani accounts due to fraud

The telecom subcommittee is led by Jazz CEO Aamir Ibrahim. The President and CEO of PTCL Group, the CEO of Cybernet, the CEO of Nayatel, and the CEO of Nayatel’s parent company Telenor Pakistan’s Zong. Experts Ismail Shah and Parvez Iftikhar are also on the subcommittee.

USF has spent 100 billion rupees to bring communications to areas of the country that didn’t have them before. They said that even though the network was growing, many areas were still not being taken care of.

The rough terrain, lack of people, bad weather, lack of electricity, lack of backhaul, bad logistics, and lack of security clearance have all caused problems for the USF.

From 2006 to 2019, the USF put Rs. 55 billion into 50 different projects. Since 2019, USF has allocated Rs. 58 billion to 60 projects. Coverage for telecommunications went from 44% in 2005-2006 to 90% now.

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