Pakistan Telecommunication Authority (PTA) has intended to reinforce competition in telephony and Internet services markets in those regions where operators are dominant in their respective sectors.
The telecom regulator has issued consultation papers recently to promote fair competition the markets of telephony and Internet throughout the country. This includes cellular phone, wireless, landline phone as well as broadband both retail and wholesale.
However, the authority has not taken decision in this regard and sought opinions of the stakeholders particularly telecom operators and consumers.
Pakistan Telecommunications Rules, 2000 have laid down the criteria for determination of Significant Market Power (SMP) operators in the relevant markets.
Accordingly, Rule 17 states that an operator shall be presumed to have significant market power when it has a share of more than 25 percent of a particular telecommunication market. The relevant market for these purposes shall be based on sectoral revenues.
The Authority may determine that an operator with a market share of less than 25 percent of the relevant market has significant market power. It may also determine that an operator with a market share of more than 25 percent of the relevant market does not have significant market power.
In each case, the Authority shall take into account the operator’s ability to influence market conditions, its turnover relative to size of the relevant market, its control on the means of access to customers, its access to financial resources and its experience in providing telecommunication services and products in the relevant market.
The telecom sector of Pakistan including Azad Jammu, Kashmir and Northern Areas (AJK & NAs) can be divided into different relevant markets on the basis of geographical area and products/ services offered in that particular market segment.
Since the issuance of said determination, the telecommunication markets have changed considerably regarding the size, scope, diversity and dynamics. Therefore, for promotion of fair competition in the sector, it is essential that operators with SMP status should be identified with respect to each relevant market in order to prohibit them from abusing their dominant positions through anti-competitive practices.
PTA has declared some companies as SMP of their respective markets and intended to promote competitive practices in the regions to dilute the monopoly of the operators.
Keeping this in view, the authority initiated the consultation process on review of relevant markets in August 2006, however, the same could not be concluded due to a host of factors.
Pakistan’s teledensity based on the overall growth of cellular phone, wireless and landline subscribers has reached 61.80 percent. The cellular phone sector density has contributed the lion share with 58.20 percent in the overall pie with 94.342 million subscribers of different operators.
Wireless Local Loop (WLL) density grew to reach 1.6 percent so far. Its overall users’ base has increased to 2.615 million in the country. It is comparatively a small sector but also competitive with eight operators market.
Fixed Local Loop (FLL) or fixed landline density on the decline to stable at 2 percent.
The total number of subscribers stands at 3.72 million by the end of December 2008 on the network of five operators, the latest data provided by telecom operators said.
