The wholesale IP bandwidth, internet bandwidth, and pricing structure will be reviewed and evaluated by the Pakistan Telecommunication Authority (PTA).
Pakistan presently has seven undersea cable landing stations, according to sources who spoke with ProPakistani. Operators continuously invest in their cable networks to fulfill current and future demands.
As a result, organizations like PTCL, TWA, and Cyber Internet pay foreign operators in USD for costs related to O&M, IP ports, circuits, interlinking, and bandwidth transportation within Pakistan. In the meantime, expenses incurred within Pakistan are expressed in Pakistani rupees and include network operations, domestic bandwidth transport, and HR pay.
A product’s input cost may be composed of both USD and PKR. Official documents said that the percentage share of USD and PKR in the input cost must be computed to determine the effect of any change in the USD value on a product’s output costs/price.
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The exercise aims to prevent getting involved in private disagreements between licensees. Instead, its objective is to examine if any business agreement, formed or planned under the licensing system, requires regulatory action. This evaluation examines whether these partnerships constitute anti-competitive behavior, cross-subsidization, or onerous practices that could restrict customers’ ability to obtain telecom services from authorized providers.
Worldwide, the cost of internet bandwidth is decreasing, and as a result, wholesale IP bandwidth suppliers are benefiting Pakistan’s downstream operators by passing along the savings on foreign bandwidth.
According to PTA, payments for wholesale Internet bandwidth in Pakistan are made in equal Pak Rupees (PKR) on the day of payment, with charges made in US dollars (USD). For this reason, the price of Internet bandwidth for wholesale clients automatically rises in proportion to any decline in the value of the Pakistani Rupee relative to the US dollar.
Furthermore, because of the rupee depreciation, wholesale internet service providers must pay a larger price in PKR to global/international internet bandwidth suppliers. According to the State Bank of Pakistan, the value of the Pakistani rupee fell by 83% between January 2020 and August 2023, or roughly 17% annually. However, the Pakistan Bureau of Statistics (PBS) reports that throughout these three years, the country’s inflation rate averaged about 16% annually. The Authority has designated TWA and PTCL as SMP operators in the wholesale IP bandwidth market in its Determination dated July 23, 2021.
According to Section 11(1) of the Fixed-line Tariff Regulations, 2004: “The tariffs for leased line services of an operator who is determined by the Authority to have SMP status in the leased line market shall be on cost.” When determining or approving leased line tariffs, the Authority may use international benchmarks of comparable nations until the point of cost determination.
The operator is allowed to lower the rates for leased lines than those approved, but only if they notify the Authority thirty (30) days before the new tariff goes into effect. Since concerns about the market’s wholesale charging practice fall under the purview of Sections 4(c), 4(d), and 4(m) of the Act, as well as Regulation 6 of PTA’s (Functions & Powers), 2006, consultation has begun. The relevant regulatory framework authorizes PTA and can consult on market wholesale billing structures.
It is clear that the consultation procedure will not affect any existing business agreement between the parties signed and implemented.
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IP bandwidth is a service that allows bandwidth suppliers to give capacity to several users. The quantity of data that can be sent over a network in a predetermined time is known as bandwidth. The internet bandwidth that Pakistani carriers offer is drawn from several global bandwidth providers’ massive global pool of bandwidth.IP bandwidth differs from IPLC, a point-to-point link between two parties. The fact that IP bandwidth is provided distance-less because traffic flows in numerous paths to reach multiple destinations is a crucial characteristic of this technology.
Two submarine cable companies were operating in Pakistan before August 2023: Transworld Associates (TWA) and Pakistan Telecommunication Company Limited (PTCL). According to a recent PTA approval, The PEACE Cable System can now provide cyber internet services throughout Pakistan. Cyber Internet Service is currently using bandwidth capacity for internal needs.
Services for other providers are anticipated to launch in Q4 2023, though. Every other downstream provider, such as fixed line and mobile cellular operators, purchases international bandwidth in bulk from PTCL and TWA (submarine cable operators) and resells it to residential and business clients at retail.
SCO runs a cable station at SCO node Khunjerab and owns an OFC-based Transmission Network. Under a tripartite agreement with CMPak and China Mobile International (UK) Limited, SCO is also giving CMPak access to an end-to-end circuit for its unique and exclusive use.
Soon, more international cables are expected to enter Pakistan due to operators investing in the infrastructure necessary to acquire international bandwidth.
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