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PTA lowers Mobile Termination Rates to Rs0.5 per min from January

27 Nov, 2021
PTA believes lowering of the MTRs would allow more competitive offerings for customers. BR
PTA believes lowering of the MTRs would allow more competitive offerings for customers. BR

By Tahir Amin

ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has revised the downward Mobile Termination Rates (MTRs) to Rs0.50 per minute from 1st January 2022 against the current Rs0.70 per minute, which would allow more competitive and innovative offerings such as free minutes’ bundles (both off-net and on-net) for consumers.

The MTRs would be further revised to Rs0.40 from 1st July 2022 to 30th June 2023 and would be further revised downward to Rs0.30 per minute from 1st July 2023 onwards.

Maj-Gen Amir Azeem Bajwa (Retired), chairman PTA-led panel, heard the matter “Determination on Mobile Termination Rate,” where the decision of reducing the MTR was taken.

Reduction in the MTRs has been made after thorough consultation with the telecom industry. The PTA is of the view that lowering of the MTRs would allow more competitive and innovative offerings such as free minute off-net bundles for the consumers.

It is expected to make market healthier and beneficial in terms of lower tariffs for making off-net calls. It would also benefit smaller operators in terms of reduced net payments to be made to the bigger operators.

In July 2021, the PTA issued a consultation paper, wherein, it was observed that current MTR of Rs0.70 per minute in Pakistan is still higher than the benchmarking results of the MTR determination of 2018 and the MTRs prevailing in regional countries.

Further, the PTA had also received requests from telecom operators to review the existing mobile termination rates. Majority of the responses received, supported the PTA’s recommendation to lower MTR.

However, there were opposing responses too. After industry hearing and thorough analysis, the PTA has determined the MTR for all types of calls (i.e. local, long distance and international incoming calls) terminated on mobile networks from other mobile networks or fixed networks in Pakistan and AJ&K/GB, to be Rs0.50 per minute from January to June 2022, Rs0.40 per minute from July 2022 to June 2023 and Rs0.30 per minute from July 2023 onwards.

The MTR is the “price that a Cellular Mobile Operator (CMO) charges to another mobile operator for terminating its off-net calls on its network.”

Generally, the end users are not aware of wholesale termination charges, which are settled among the operators. Higher termination charges expect to favour larger players as compared to smaller operators; hence, role of regulator is important to provide a level playing field by rationalising the termination rates in the telecom sector.

This article was first published in Business Recorder on Nov 27, 2021