In late 2006, PTA determined that PTCL needs to revise its bandwidth prices downward to help keep the country moving towards a broadband friendly environment and to match and compete in the region as a country. PTCL responded back by first moving Lahore High Court against the determination (and being declined the plea). The new leadership at PTCL continues the historic attitude and has now moved the Supreme Court against the determination. The News has the complete story here.
KARACHI: The Pakistan Telecommunication Company (PTCL) ñ the largest telephony and the only Internet backbone provider – has challenged Pakistan Telecommunication Authority (PTA)’s decision to cut Internet bandwidth tariff in the Supreme Court after its appeal was dismissed by the Lahore High Court.
In a recent move the privatised entity appeared firm to counter the regulator’s October 2006 verdict in which it reduced the PTCL’s Internet and data circuits prices by 20 to 30 per cent effective from January 2007.
“The PTCL management filed an appeal before the LHC against the PTA’s decision and initially succeeded in obtaining a stay order but the appeal was finally dismissed by the LHC in February 2007,” said a source privy to the development.
“Earlier, the PTA issued another determination on reductions of bandwidth prices in June 2006 which was set aside by the LHC and the case was remanded back to the PTA to decide afresh within two months.”
The LHC in its February 2007 order noted “earlier the case was remanded with the direction that the appellant (PTCL) be provided an opportunity of being heard. The perusal of the impugned order shows that every objection of the PTCL/appellant has been dealt with in detail and has been disposed of by the Authority (PTA).
The Authority has given reasons for making the order and while determining the tariff and has exercised its jurisdiction fairly, justly and in advancement for the purpose of enactment on the mandate of Section 24-A of the General Clauses Act, 1897 in consonance with the above case law”.
The decision went on to say: “For what has been discussed above, I do not find any reason to interfere with the well reasoned order passed by the PTA. This being so, this appeal fails and is dismissed”.
However, the source said, the PTCL was reluctant to implement the PTA’s order and to the disappointment of Internet and broadband users, it had now moved the Supreme Court against the LHC decision.
He said the PTA started the process of bandwidth price reduction in March 2006 upon receipt of a directive from President General Pervez Musharraf, who while meeting a delegation of Pakistani entrepreneurs from the United States, directed the PTA to rationalise the bandwidth rates in the country.
“But industry analysts believe the PTCL’s management is fully determined to block the PTA’s decision to cut bandwidth tariffs, as it may affect its annual revenue negatively. Now the PTA is in a dilemma on non-implementation of its orders by the PTCL,” said the source.
“When competitive backbones would be established and gone operational, the PTCL would reduce its prices and the PTA would then be asking PTCL not to undercut private operators.” The PTCL reported a sharp fall in half-year net profit as revenue from international calls fell, but analysts forecast a stronger second half.
The PTCL, Pakistan’s second-largest listed firm, said it earned net profit of Rs8.37 billion in the six months to December 31, 2006, 22.71 per cent lower than Rs10.83 billion in the year-ago period.