From July 1, 2022, the Pakistan Telecommunication Authority (PTA) will reduce Mobile Termination Rates (MTRs) from Rs.0.50 to Rs.0.40, making off-net calls even cheaper in Pakistan.
The MTR is defined as the “price that a Cellular Mobile Operator (CMO) charges to another mobile operator for terminating off-net calls on its network.”
According to official papers, PTA fixed the Mobile Termination Rate (MTR) at Rs.0.70 per minute from January 2020 onwards in its 2019 review. Still on the upper end, the MTR’s 2021 review established the tariff to be Rs.0.50 for January 2022-June 2022, then Rs.0.40 from July 2022 to June 2023, and lastly Rs.0.30 from July 2023 onwards.
End-users are generally unaware of wholesale termination charges, which are agreed upon among the operators. Higher termination prices are expected to favor larger companies over smaller carriers; thus, the role of a regulator is critical in ensuring a fair playing field in the telecom sector by rationalizing termination rates.
On November 24, 2021, the PTA issued a determination on the aforesaid MTR rates for Pakistan, AJ&K, and the United Kingdom for all types of calls (i.e. local, long-distance, and international inbound calls) terminated on mobile networks from other mobile networks or fixed networks.
The MTRs were reduced following extensive discussions with the telecom industry. Lowering MTRs, according to the PTA, would enable for more competitive and innovative options for customers, such as free minute off-net packages.
It is expected to make the market healthier and more beneficial by lowering off-net call tariffs. It would also benefit smaller operators by lowering the net payments to the larger providers.
The PTA published a consultation document in July 2021, in which it was noted that Pakistan’s current MTR of Rs.0.70 per minute is still higher than the benchmarking results of the MTR determination in 2018 and the MTRs in regional nations.
In addition, the PTA had received requests from telecom companies to evaluate the current mobile termination prices. The majority of answers favored the PTA’s recommendation to reduce the MTR.
However, there were also counter-arguments. The PTA determined the MTR for all types of calls (local, long-distance, and international incoming calls) terminated on mobile networks from other mobile networks or fixed networks in Pakistan and AJ&K/GB to be Rs.0.50 per minute from January to June 2022, Rs.0.40 per minute from July 2022 to June 2023, and Rs.0.30 per minute from July 2023 onwards, following an industry hearing and thorough analysis.