Since the introduction of the Telecom Deregulation Policy in July 2003, the sector exploded from a paltry 5 million cellular subscribers at the end of fiscal year 2004 to a whopping 120 million by FY12. The number was 132 million at the end of April 2015.
Among other objectives, the policy’s goal was to “liberalise the telecommunication sector by encouraging fair competition amongst service providers and increase service choice for customers of telecommunication services at competitive and affordable rates.”
Even today, the five cellular mobile operators (CMOs) are engaged in a fierce competition or price war to win subscribers and the country’s cellular tariffs, one of the lowest in the world, are a testament to the policy’s success.
On the contrary, over-regulating the private sector only holds the industry back from further growth. Take for example Rehman Malik, the former interior minister, whose regressive policy directives still haunt the industry and consumers alike.
Malik, who earned more fame for regulating the telecom sector – Twitter followers to be precise – than managing his own portfolio, left no stone unturned to harm the industry’s growth.
Blanket suspension of cellular services for security reasons cost billions to the industry. Restrictions were imposed on sales channels including the company-owned customer support centres as Malik even proposed that the CMOs should dispatch new SIMs to the buyer’s home address as printed in the computerised national identity card (CNIC).
The ministry also proposed a ban on mobile number portability (MNP), a facility that allows the user to switch his service provider without changing the number. He also limited the number of SIM cards a company can sell against a single CNIC to a maximum of five.
As a result of these backward-looking policies, the sector’s growth slowed down and it lost billions in potential revenues – so did the government by losing what it could earn in taxes.
Fortunately, many of these directives were reversed with the exception of five SIMs per CNIC, which stays intact to date.
The limit of five SIMs per CNIC was imposed to discourage the illegal sale of SIMs – a security measure to combat terrorism. However, do we still need this restriction?
The CMOs have re-verified their entire user base through the biometric verification system (BVS) and blocked those that remained unverified or were disowned by their owners with the exception of a few that will be blocked automatically once they remain inactive for 90 days.
The biometric verification kills the very basis on which the limit of five SIMs was imposed. The government, therefore, should increase this limit after consulting the private sector, which understands the market better.
There are some things that should be left to market forces as opposed to being regulated. If there is demand for more than five SIMs per CNIC, the telecom sector should be able to meet this and the government should not have any role in it.
After last year’s spectrum auction for mobile broadband services, the country’s telecom sector has entered a new growth phase. Such restrictions will hurt not only the industry, but also the consumers.
Owing to the cultural trends in Pakistan, mobile phone SIMs including those of females and under-age users are usually registered in the name of male members of the family who, in most cases, have exhausted their limit of five SIMs, Propakistani wrote in a recent blog post.
People who want more than five SIMs are denied by the operators and with mobile broadband (3G and 4G) available, the demand for separate conventional and data SIMs will increase, it said.
It will, therefore, be a wise step by the government to increase this limit, which indeed will help expedite broadband penetration. Besides, the government can earn more in taxes – it charges Rs250 on every SIM in activation fee.
The writer is a staff correspondent
Published in The Express Tribune, June 22nd, 2015.