Lower MTR PTA to reduce operator costs and benefits

The Mobile Termination Rates (MTR) have been observed in Pakistan above worldwide benchmarks, and can be revised down to Rs. 0.30 per minute from 1 October 2021 against the existing Rs. 0.70 per minute.

Reducing the MTR will assist to decrease each operator's variable cost and provide the benefits to customers as lower rates, enable operators deliver better off-net call rates, reduce on-line and off-net differential levels, and safeguard smaller operators' interests.

The MTR is the "fee charged to a mobile operator for terminating off-net calls to his/her network by a cell phone operator. End-users are generally unfamiliar with the wholesale termination fees paid by the operators.

The role of the regulator is therefore vital to provide a fair play by rationalising the termination rates in the Telecoms sector, with greater termination costs to larger participants than the smaller operators. In addition, good interconnection implementation fosters competition in the telecoms industry, stated the PTA.

The PTA has performed worldwide benchmarking study which reveals that, according to the adjustment of the purchasing power parity (PPP), the computed MTR for Pakistan is between Rs. 0,28 and Rs. 0,30, and is between Rs. 0,12 and Rs. 0,24 in line with the average user income (ARPU).

Consequently, the present MTR in Pakistan of 0.70/min is far higher than the MTR with benchmarking computed. It has so allegedly been recommended that Rs. 0.30 per minute with effect from 1 October 2021 may be established in the MTR in Pakistan.

Based on the worldwide benchmark, the final adjustment to the MTR was decided in 2018. A further review of the MTR is necessary if we are to adopt a glide path approach because, as of 2018, the present MTR in Pakistan at Rs. 0.70/min is still greater than the international benchmark figures — the MTR at Rs. 0.30 to Rs. 0.43 per minute according to the PPP adjustment and Rs. 0.18-Rs. 0.19 per minute in accordance with the ARPU.

The MTRs are also higher in Pakistan than the MTRs in the regional nations and telecommunications companies were urged to examine the MTRs.

The cost-based connection costs are evaluated not fewer than once every 2 years, provided that they are in accordance with Article 5.1.12 of the Telecommunication Policy. Data on cost-based connectivity costs are not easily available in the case of Pakistan. Accordingly, in conformity with Clause 18.6 of these interconnection rules, this consultation document proposes a benchmarking test to determine the MTR of Pakistan that allows the PTA to set benchmarking interconnection rates if sufficient information on costs is not readily accessible.

The PTA collected a sample from 26 nations and compared it with the Pakistani PPP-adjusted MTRs using the means and median of PPP-adjusted MTRs. The suggested MTRs were therefore computed as Rs. 0.30 and Rs. 0.28 correspondingly for the average and median benchmarks.

In sample nations, the ARPUs in mobile cellular markets range from 1.37 to 30.96 dollars. The PTA evaluated sample nations' ARPUs in relation to Pakistan's ARPU for alternative benchmarking. The recommended MTR for Pakistan is between Rs. 0.24 (mean) and Rs. 0.12 using this approach of benchmarking (median).

Thus the present rs. 0,70 MTR in Pakistan is still rather high than the MTR on the basis of worldwide benchmarking, which is recommended above.

The mean and median of the PPP-adjusted MTRs were used to create average benchmarks, and they were compared with Pakistan PPP-adjusted MTRs. As a result, Pakistan's MTRs are computed by mean and median respectively, as Rs. 0.32 and Rs. 0.28. ARPUs in the sample nations' mobile cellular markets range from $1.37 to $24.12.

For alternative benchmarking, ARPUs were utilised in the sample nations compared to Pakistan's ARPU. The recommended MTR for Pakistan is Rs. 0.16 (mean) and Rs. 0.15 based on modified benchmark for ARPUs (median).

The suggested PPP adjustment-based MTR is 0.28 to Rs 0.32 in relation to Rs 0.30 and Rs. 0.43 for Pakistan.

In light of MTRs in the USD area, Pakistan's cents for USD 0.45 per minute are much higher than those in Bangladesh, India, Malaysia, and Sri Lanka, respectively, which amount to US cents 0.16, 0, 0.24 and 0.28.

Post a Comment

Please do not enter any spam link in the comment box.