February 16, 2007

Lahore High Court dismisses PTCL Appeal on Bandwidth Tariffs

Lahore High Court dismisses PTCL Appeal on Bandwidth Tariffs

Islamabad: Lahore High Court (LHC) at Rawalpindi today dismissed PTCL's appeal against PTA's decision on PTCL's bandwidth tariffs. The Pakistan Telecommunication Authority (PTA) in a landmark decision on October 6, 2006 substantially reduced various categories of PTCL's bandwidth tariffs. PTCL, a recently privatized company, in reaction to PTA's aforementioned decision filed an appeal in the Lahore High Court at Rawalpindi against the said decision.

Barrister Khalid Anwar represented PTCL, whereas Senior Advocate Raja Mehmood Akhtar and Raja Nowsherwan Akhtar  represented PTA. Justice Mr.Abdul Shakoor Paracha after hearing the arguments presented by the legal representatives of PTCL and PTA, announced the dismissal of PTCL's appeal against the PTA Decision.

The industry had been approaching PTA to regulate the bandwidth tariffs emphasizing that the tariffs charged by PTCL are abnormally high and thus do not give them any competitive advantage in the International Market. Moreover, some investors also contested that the tariff structure of PTCL discouraged them to make investment in Pakistan, as it is cheaper to acquire these facilities from other Asian countries.  This entire scenario had been hampering the broadband proliferation and has affected the growth of IT enabled services in Pakistan that are heavily dependent on bandwidth tariffs.

PTCL as a recently privatized incumbent fixed line operator has a market monopoly over telecom infrastructure and off late has been engaged in anti competitive practices. The PTA is closely monitoring PTCL's anti competitive activities and has many a times warned PTCL to desist taking unnecessary steps that can potentially bring infamy to Pakistan's Telecom Market. PTA has also recently concluded a few cases of industry complaints against PTCL's anti competitive behavior on which decisions will be announced shortly.

With the dismissal of PTCL's appeal the decision of the Authority has been upheld by the LHC and it is expected that the reduced bandwidth tariffs shall have a far-reaching implications in proliferation of broadband and IT enabled services as bandwidth cost is a critical factor that determines investment in broadband and IT enabled services.

It may be noted that Authority after considering the arguments of all stakeholders had issued its decision and had announced that in the absence of cost related information the bandwidth tariffs of PTCL should be in accordance with the international benchmarks of countries where effective competition exists.


Khurram Ali Mehran

Deputy Director (PR)