PTA is planning to revisit and revise the Long Distance & International (LDI) license template in response to various challenges faced by the telecom sector.
The Pakistan Telecommunication Authority (PTA) is planning to revisit and revise the Long Distance & International (LDI) license template in response to various challenges faced by the telecom sector. Issues such as the devaluation of the local currency and high-interest rates have exerted pressure on both capital and operating costs, impacting business cases and profit margins within the industry.
Under section 5 (2) (a) of the Pakistan Telecommunication (Re-organization) Act, 1996, the PTA has the authority to grant and renew licenses for telecommunication systems and services. In accordance with section 20 of the Act, no entity can establish or operate any telecommunication system or provide services without obtaining a license.
The PTA, empowered by the Act, revised the Long Distance & International (LDI) license template in 2022, imposing a roll-out obligation requiring the deployment of 1500 kilometers and the submission of a Performance Bank Guarantee (PBG) after consulting with stakeholders.
However, the telecom market in Pakistan is currently facing a transformed business landscape, marked by challenges such as currency devaluation and high-interest rates. To address concerns raised by telecom licensees, the PTA has decided to conduct another consultation, focusing on two key license conditions: Network Rollout Obligations and Security for Performance.
The challenges in the industry, including financial implications and increased costs of doing business, are attributed to factors like currency devaluation and high-interest rates. The PTA aims to examine these concerns through consultations with stakeholders to ensure a balanced and conducive regulatory framework.
The issues identified for consultation include:
- Linkage of Performance Bank Guarantee (PBG) to the roll-out obligation of laying 1500 kilometers of Optical Fiber Cable (OFC) or Gateway Earth Station, in addition to Points of Presence (PoP)/Switching Offices and Network Control Points (NCP) in each Telecom Region.
- Roll-out modalities/methodology for laying 1500 kilometers of OFC.
- Addition of any other “Technical & Financial Plan” as an option under clause 3.2.6 of the LDI License.
The PTA emphasizes its awareness of the need for the proliferation of OFC networks and the expansion of a resilient fixed-line network to meet the growing demands of the telecom sector. Despite the challenges, the PTA has approved five new LDI licenses in 2023, and there are currently no pending LDI license applications.
This fresh consultation aims to evaluate and address concerns related to the existing LDI license template, considering the dynamic nature of the telecom industry and the need for regulatory frameworks that support sustainable growth and development.
As Pakistan’s telecom sector continues to evolve, regulatory adjustments and consultations become essential to ensure that industry players can navigate challenges effectively and contribute to the country’s digital transformation.