NEPRA rejects the request of the telecommunications operators asking for the application of an industrial tariff

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has rejected a petition from telecommunications companies seeking a review of the tariff from commercial to industrial.

The authority justified the decision by stating that the telecommunications companies did not meet the criteria for determining the final consumer tariff for the application of an industrial supply tariff.

The decision was made after Pakistan Telecommunication Company Ltd. (PTCL), Telenor Pakistan (Private) Ltd., Pak Telecom Mobile Ltd (PTML), Pakistan Mobile Communication Ltd. (PMCL) and Deodar Private Ltd. have filed separate petitions asking the authority to approve the said revision in the light of the status granted by the government by notification n°l (11)/2004-lnvIIl. According to the notification dated April 20, 2004, the telecommunications sector, including cellular operators, was classified as an industry.

While a hearing for PTCL’s motion was held on April 5, 2022, the motions of PTML, PMCL and Deodar Pvt. ltd. were scheduled for 05 July and were attended by speakers CM Pak (Zong), Ministry of Energy, K-Electric, Central Power Purchasing Agency (CPPA) and other relevant stakeholders.

The authority is of the view that the term “value added”, used in the definition of industry for the purpose of applying an industrial supply tariff, is used in the context of value added through a manufacturing or production process. In the event that a broader meaning of the term “value added” is assumed as a large number of business activities, falling within the definition of industry, in relation to the electricity tariff, which cannot be l intent of the definition given in the final consumer rate determinations.

It can be noted here that telecommunications operators in Pakistan provide mobile and broadband services to 188 million subscribers with an annual turnover of more than 400 billion rupees, creating 25,000 direct and indirect jobs. The telecommunications sector has brought in foreign direct investment (FDI) of over $10 billion to date and continues to do so in the form of license renewals, spectrum usage fees, and more.

Commenting on NEPRA’s decision, Federal Minister of Information Technology and Telecommunications Syed Amin Ul Haque expressed concern and said the right decision could benefit both consumers and the country’s national kitty.

In a statement, he said the telecommunications sector had been given industry status by the government. “We believe that telecommunications companies have the right to obtain electricity rates at industrial rates.”

Haque said the issue is not just limited to the telecommunications sector, but can be an important step towards providing better facilities for consumers and attracting foreign investors.

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