Telecom companies demand increase in project subsidies

ISLAMABAD: Telecom companies have demanded enhancement in subsidies over the ongoing projects and an extension in the time-frame for provision of internet and telecom services to remote areas of the country.

In a letter written by the management of three telecom companies — Jazz, Telenor and Ufone — to the IT Ministry, they informed the authorities that the available stock of spares for operations and maintenance (O&M) had almost depleted due to the ban on import of telecom equipment and these challenges and emergent economic factors were hurting them financially. The key issues highlighted in the letter were a shortage of dollars that has led to rejection of permission from the State Bank to open LCs for the import of equipment and components and declining value of rupee, which was adding to the high cost of doing business. The telecom companies also asked the ministry and Universal Service Fund Pakistan (USF) to enhance the subsidy over the ongoing projects, as the dollar value had increased from the time of award of contracts. They have also asked for introducing the provision of operational expenditure subsidies at ongoing USF projects due to rising inflation from fuel, site maintenance and other factors.

Besides, they also sought an extension in the timelines of all existing and new contracts until the stabilisation of the economic situation, saying, “The current economic instability in the country is at an all-time high where the costs of network operability are heavily starting to outweigh the return on further investment.” The maintenance costs, including utilities at telecom towers and other infrastructure, had increased by more than threefold, they added. There are around 1,400 telecom projects under USF across the country, including Balochistan, KPK, Punjab, Sindh and Islamabad.