Commerce Reporter

ISLAMABAD: Despite the fact that the telecom sector was given an “industry” status by the government, making it entitled to avail industrial power tariffs, the National Electric Power Regulatory Authority (NEPRA) has dismissed petitions filed by telecom companies on the matter.
The government’s decision to grant the telecom sector the status of industry has also been endorsed by numerous ministries over the years, most recently through the Finance Bill, 2021, reiterating its industrial status, yet telcos are being subjected to commercial tariffs, leading to an increasing cost of operations.
The petitions were filed by Pakistan Telecommunication Company (PTCL), Telenor Pakistan, Pak Telecom Mobile (Ufone), Pakistan Mobile Communication Ltd. (Jazz), and Deodar whereas CM Pak (Zong), Ministry of Energy, K-Electric, CPPA-G participated as interveners.
The petitioners highlighted that under Article 25 of the Constitution of Pakistan, all citizens are equal before the law and are entitled to equal protection of the law.
Telecom cannot be considered as an industry only for the purposes of paying tax rather is also entitled to the corresponding benefits as well, they argued.
Currently, for paying heavy taxes it is being treated as an industry, but for the purposes of tariff, it is treated otherwise, they contended, adding that the telecom sector is entitled to equal treatment of burden as well as benefits of the industrial status.
Telecom operators also argued that as per the eligibility criteria established through NEPRA’s own tariff determinations, any business or establishment which is undertaking value-adding activities or processing is eligible for an industrial tariff.
Each operator has been assigned radio waves by the federal government (called spectrum), to use and provide their services, and operators set up towers, antennas, circuits, cables, and other equipment all across the country, through which they convert/switch basic radio waves into useable services (e.g., data, voice calls, SMS), they added.
Further, in this digital age, the telecom sector has evolved into data processing, sourcing, and management which, is globally recognised as an industry, they argued.
The arguments from interveners such as K-Electric, CPPA-G, Ministry of Energy overall suggested that the authorities still consider the telecom sector as a luxury rather than a necessity. They stated that the Finance Division believes that telecom companies are involved in commercial activities and electricity cost is a pass-through item, which is incorrect because telecom companies do not pass on power tariff hikes to their customers as practiced in the case of power distribution companies.