Teclos Suffered Because the Government Prioritised Regulation Overgrowth.

In the previous four years, the telecom sector has had one of the roughest periods in terms of regulatory and policy measures, which has had a detrimental impact on the sector.

Almost no expansion initiatives were seen throughout the time period, and an overwhelming amount of emphasis was placed on enforcement. During this time, there were also more lawsuits than ever and restrictions on industrial space in commercial buildings.

The following is a glimpse of the telecom industry during the past four years:
no meaningful strategic actions

1. Only one spectrum auction took place, and Ufone was the only participant. Of the total spectrum offered, 34.2% was sold. Less than one-third of the estimated $1 billion was spent on the spectrum auction, which brought in $279 million. The Pakistan Telecommunication Authority’s (PTA) strict licence requirements were the main cause of the failure.
2. No serious headway on 5G enablement
3. The Telecom Policy 2015 did not specify the creation of any significant regulatory frameworks (spectrum sharing, trading, re-farming). The interest in spectrum transactions decreased as a result.
4. Critical licensing review mandated under Telecom Policy 2015 has still not been done and licenses have been renewed for a long term without review.

Excessive focus on Enforcement

1. Compared to the prior four years, almost 100 show-cause notices were sent to the industry (in the previous four years the number of show-cause notices was zero).
   For improved monitoring systems, the sector was compelled to pay significant sums.
2. In comparison to all other industries, industry revenue growth underperformed and stayed flat in Pakistani Rupee terms, while declining in US Dollar terms (from $4.8 billion in 2017 to $3.6 billion in 2021).
3. Industry Average revenue per unit (ARPU) decreased from $1.6 to < $1 in the last 4 years

Constraints on commercial space for industry

1. Disproportionate curbs on SIM sales and no improvement in SOPs despite industry expenses on SIM-related initiatives.
2. Extensive promotion of free services for all government departments resulting in equivalent value loss for the industry.
3. No regulatory support to prevent value erosion in the industry.
4. Slow and insufficient approval of critical tariff proposals and further measures to micro-regulate tariffs across the industry
5. Industry value which should be above a Trillion PKR (as in comparable markets like Nigeria) is still stuck at Rs. 644 billion.

Highest litigation

1. 2019 -2022 were years of the highest litigation and conflict for the telecom industry
2. All major license renewals of almost all operators (Telenor, Zong, and Jazz) were contested resulting in huge uncertainty and loss of investment interest.
3. Zong contested all major orders of the regulator whereas the industry jointly contested major orders challenging the legal infirmity.
4. There is severe unrest in the industry due to the escalation of conflict.

Growth Numbers

1. Overall revenues stagnated during the last four years
2. So was the case with ARPUs, which actually declined lately.