The PTA was requested by the Ministry of Information Technology and Telecommunication to respond to the questions and provide the proper legal protocol.
The official sources revealed that Pakistan Telecommunication Authority (PTA) has connected the floor price uplift mechanism for cellular mobile operators (CMOs) with the Competition Commission of Pakistan’s (CCP) no-objection certificate (NoC) to adhere to deregulated market principles.
The CMOs demanded a one-year moratorium on quality-of-service, roll-out obligations, a moratorium on Universal Service Fund (USF) and R&D fund reductions from 2% to 1%, and a floor price uplift mechanism for voice and data to optimise base price.
The PTA was requested by the Ministry of Information Technology and Telecommunication to respond to the questions and provide the proper legal protocol. According to official sources, the PTA informed the MOIT that the Authority could take the operators’ requests for a data floor price into consideration if the CCP gave its NOC.
According to sources, some operators offer data at a lower tariff to their subscribers, which does not work for larger operators, who wanted a fixed base price after operators were allowed to set their own prices. To prevent some operators from having a monopoly, the PTA has tied the revision and sitting floor price to the CCP NOC.
Telecom is a deregulated industry in the country, according to sources in the PTA, so it is free to set a floor price on its own, absent agreement from all operators.
Sources stated that the CCP is the appropriate forum in these circumstances to ensure competition and market principles to prevent monopolies. However, the PTA has agreed to place rollout obligations on a case-by-case basis rather than accept the CMO’s demand for a moratorium on service quality.
A price floor is a restriction on how low a price can be charged for a good, commodity, or service that is imposed by the government or another group. To be effective, a price floor needs to be higher than the equilibrium price.