2 Mobile Companies Want an End to SMS Packages

Two leading Mobile operators are favoring to impose 10 paisa charges on all text messages sent to other networks, while another two operators opposed the idea – fifth operator remained somewhat neutral, in a high level industry meeting held at PTA headquarters yesterday, told us sources at PTA.

These other-network charges (interconnection charges) can be the death of SMS packages, as currently mobile operators are allowing as many as 500 text messages a day for Rs. 4 to 5, which will become impossible with 10 paisa per SMS charge.

Telenor and Mobilink were of the view that due to their larger customer base, they receive highest number of text messages from other networks.

However, industry sources revealed that actual hindrance is network capacity of these two operators. A good explanation of this fact is that Ufone is opposing the charges, which has somewhat same size of subscriber base as of Telenor.

SMS facility is widely used and liked by mobile phone subscribers in Pakistan. Some researches consider the low priced SMS as key factor behind the fast growing communication trends in the country. Due to its low price and nature of channel, SMS can’t be replaced by any other mode of communication.

SMS lovers were first threatened by Government taxes, which were later on withdrawn by Prime Minister, but now the current regime by cellular operators may put all SMS packages on halt.

It merits mentioning here that Telenor has already slashed their SMS packages by limiting the off-net and on-net quota. For instance, if a SMS package allows 1000 SMS in one week, customer can’t send more than 500 off-net or otherwise on-net messages.

As per anticipations, if regulated, other network SMS charges will be widely opposed.

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Cell firms to withdraw SMS offers

LAHORE: After imposition of 20-paisa tax per SMS, the cellular companies are likely to withdraw their discount packages from July 1.


‘It will not be possible for us to continue with the bundle package offers in the wake of fresh tax,’ a representative of a cellular company told Dawn on Wednesday.


He said though the government in the federal budget 2009-10 had reduced the general sales tax and SIM activation charges from 21 per cent to 19 per cent and Rs500 to Rs250, respectively, 20-paisa increase on per SMS would not only burden subscribers but also affect the business of such companies that had introduced packages at cheaper rates.’


He said a consumer used to send an average five to seven SMS daily and youth, dumb and deaf were its major `beneficiaries.’ Some companies had started SMS service even in Urdu.


‘At the end of the day it will be clear that the government has not provided us with any relief,’ an official of another company said.


It is learnt that the cellular companies are joining hands against tax on SMS and will register their protest with the government shortly.


The Pakistan Telecommunication Authority has welcomed the concessions given to the telecom industry.


‘We do not see any major impact of SMS tax on the industry. However, we will conduct a study in this regard after a certain period,’ PTA chairman Dr Muhammad Yasin told this reporter.


‘It will be premature to say that 20-paisa per SMS tax has negative impact on the industry,’ he said.


Though the cellular companies are perturbed over the new tax but they can only register their concern with the respective quarters through PTA.


‘Unless PTA is convinced that 20-paisa per SMS tax should be reduced the companies are left with only one option – to raise the SMS rates,’ said another representative of an operator.


He said the operators would also have to suspend their ongoing ad campaigns in the wake of the new development.



‘We are now working out new packages and rates,’ he said. The cellular industry had generated a revenue of Rs278 billion in 2007-08.


The previous taxation rate on the cellular services (15 per cent) was already one of the highest in the region.


Owing to stiff competition among the cellular operators in the country, lower tariff had been introduced to attract maximum number of subscribers. Telecom sector, according to PTA, has attracted more than US$5.6 billion foreign direct investment during the last four years.


During 2007-08, the telecom sector attracted a sum of US$1.4 billion foreign direct investment which is about 30 per cent of the total FDI in the country. During 2007-08, the telecom industry ranked second after financial sector as major FDI recipient in Pakistan.

Source: Dawn News

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