Telecom companies, grappling with the impact of currency fluctuations, are pushing for alterations to their business agreements, aiming to conduct essential transactions in the local currency. In a letter addressed to the Pakistan Telecom Authority, the Overseas Investors Chamber of Commerce (OICCI) emphasized the need for a policy shift to address these concerns.
The recent depreciation of the Pakistani Rupee has prompted telecom companies to seek adjustments to their business agreements, particularly those related to the auction process, which currently necessitates payments in US Dollars for licence renewals and spectrum acquisitions. As a result, the OICCI has proposed a fundamental change, suggesting that spectrum prices in subsequent auctions be quoted in Pakistani Rupees rather than US Dollars.
Despite substantial investments in the telecom sector in Pakistan, which have totaled $5.43 billion between 2017 and 2022, the industry faces challenges such as significantly lower monthly revenue per user compared to the global average. This discrepancy, with an average monthly revenue per user of $0.80 in Pakistan compared to the global average of $8, has led to telecom companies resorting to borrowing from banks to meet their capital requirements.
While the telecom sector has significantly contributed to the national treasury, with deposits of Rs948 billion in duties and taxes over the past five years, the call for policy changes aims to address the specific challenges associated with currency fluctuations and their impact on crucial business operations.
