PTA Sets New Tariff Rules For Telcos: All You Need To Know

The Pakistan Telecommunication Authority (PTA) has announced the “Tariff for Cellular Mobile Telecommunication Services Regulations, 2024,” establishing new guidelines for cellular mobile licensees. These regulations mandate that licensees maintain pricing flexibility while protecting consumer interests and prevent cross-subsidization of other telecommunication services.

Key Principles for Setting Tariffs

The regulations apply to all cellular mobile licensees regarding the retail tariffs charged to consumers. Licensees must adhere to three key principles while setting tariffs:

1. Pricing Flexibility: Ensuring consumers’ interests are safeguarded.
2. Reasonable Returns: Tariffs should offer a reasonable rate of return on investments, considering operational costs.
3. No Cross-Subsidization: Preventing the use of revenues from one service to subsidize another.

Procedure for Tariff Approval

The procedure for tariff approval varies for SMP (Significant Market Power) and non-SMP licensees. Non-SMP operators can set and revise their tariffs after notifying the Authority and consumers at least seven days before any changes. However, the Authority retains the right to amend tariffs if they adversely affect consumer interests.

SMP licensees, on the other hand, must submit detailed tariff proposals to the Authority at least 15 days before implementing any changes. These proposals must include criteria for establishing tariffs and comprehensive cost data to ensure transparency and prevent predatory pricing.

Licensees cannot impose charges for operator assistance or directory inquiry services without prior approval from the Authority. Requests to levy such tariffs must be submitted at least 15 days in advance. Additionally, licensees must provide a free Interactive Voice Response (IVR) service for consumer assistance.

Application Process for New or Modified Tariffs

Licensees must submit comprehensive and unambiguous proposals for new or modified tariffs to the PTA’s Director General (Commercial Affairs). These proposals should include:

• Basis for setting the proposed tariff.
• Cost data and calculations to justify the tariff.
• Evidence ensuring the proposed tariff will not result in predatory or excessive pricing.
• Details for bundled tariffs to assess economic replication by other licensees.

Tariffs will be considered burdensome if they result in abnormally high profits, are significantly higher than industry benchmarks or inflation, exceed average consumer affordability, or any other factors determined by the Authority.

Regulating SMP Licensee Charges

The Authority will regulate SMP licensee interconnection charges and wholesale tariffs, including Mobile Termination Rates (MTR). These charges will be based on Long Run Incremental Cost (LRIC) or other methodologies such as international benchmarking.

Licensees must update and publish tariffs for national and international roaming services on their websites. Consumers must be informed of applicable tariffs through SMS when selecting a roaming service. Services on international roaming will only be activated upon consumer request, ensuring no charges beyond the security deposit.

Consent for Subscription Renewals

Licensees cannot automatically renew subscription-based packages without explicit consumer consent. Steps for unsubscribing from offers must be clearly communicated before the first auto-renewal.

These regulations aim to create a transparent, fair, and consumer-friendly telecommunication market in Pakistan, fostering trust and ensuring that consumers receive the best value for their money.

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