Friday, February 23, 2024

NEPRA denies telecom request to change their tariff from commercial to industrial

NEPRA rejected the telecom industry’s request to switch from a commercial to industrial tariff classification.

In its ruling, NEPRA explained that the term “value adds,” which is part of the definition of the industry for the purposes of the industrial supply tariff. Refers to the process of adding value to a product while it is doing make.

Authority said no to the cellular mobile operators’ request because the word “value addition” can get more than one meaning. More businesses can become able to apply for the purpose (CMOs).

Telecom operators in Pakistan provide mobile and broadband services to 188 million subscribers, which brings in more than Rs. 400 billion in revenue every year and directly and indirectly employs more than 25,000 people. So far, foreign direct investment (FDI) of more than $10 billion has gone into the telecom industry. It continues to do so through license renewal fees, spectrum fees, etc.

In 2004, the Ministry of Industries and Production recognized the telecom business as an industry. Because of this, CMOs has the same rights as the “industry”. Including paying less for electricity for their towers and exchanges than the “industry” does.

In 2014, the Ministry of Information and Communications Technology agreed with the idea that the telecom sector. Under paragraph (b) of subsection Section 2 (29C) of the Income Tax Ordinance, 2001, cell phone companies then do consider “industrial firms.”

In accordance with a decision by the federal cabinet. The Finance Act of 2021 added clause (c) to section 2 (29C) of the Income Tax Ordinance, 2001. This says that all telecommunication companies with a license from the Pakistan Telecommunication Authority (PTA) are also “industrial undertakings.”

CMOs sent a lot of petitions to NEPRA as it did work to establish a national price for DISCOs across Pakistan. On the other hand, they are not kept busy with anything.

The CMOs sent the Authority a second tariff petition, saying that the telecom business is an example of an industry that benefits from value additions. However, the Authority also rejected this argument.

The Minister of Information Technology Speaks Out

In the meantime, Federal Minister for IT&T Syed Amin Ul Haque has expressed his displeasure with NEPRA’s decision to deny the telecom industry’s request for industrial electricity pricing.

He said in a statement that the government has recognized the telecom sector as an industry. So telecom companies are free to buy power at industrial rates.

He went on to say that the problem is not limited to the telecom industry and that it may be a big step toward improving services for customers and attracting businesses from other countries.

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