NEPRA dismisses telcos’ petition seeking industrial tariff application

ISLAMA BAD: The National Electric Power Regulatory Authority (NEPRA) has dismissed a petition from telecom companies requesting a change in tariffs from commercial to industrial.

The authority justified the decision with the fact that telecommunications companies do not meet the criteria of the final consumer tariff determination for the application of an industrial supply tariff.

The decision was made after Pakistan Telecommunication Company Ltd. (PTCL), Telenor Pakistan (Private) Ltd., Pak Telecom Mobile Ltd (PTML), Pakistan Mobile Communication Ltd. (PMCL) and Deodar Private Ltd. had submitted separate petitions requesting that the Authority approve said revision in light of the status granted by the Government through Notice No. 1(11)/2004-InvIIl. According to the notification of April 20, 2004, the telecommunications sector, including mobile operators, has been classified as an industry.

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While a hearing for PTCL’s petition was held on April 5, 2022, petitions from PTML, PMCL and Deodar Pvt. ltd were scheduled for July 5 and were attended by interveners CM Pak (Zong), the Department of Energy, K-Electric, the Central Electricity Purchasing Agency (CPPA) and other relevant stakeholders.

The Authority considers that the term ‘value added’ used in the industry definition for the purpose of applying an industrial supply tariff is used in the context of the value added by the manufacturing or production process. In the event that a broader meaning of the term ‘value added’ as a variety of commercial activities falling under the definition of ‘industrial’ is assumed in relation to the electricity tariff, this cannot be the intention of the definition used in the Consumer Final Tariff Rules.

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It should be noted that telecom operators in Pakistan provide mobile and broadband services to 188 million subscribers with an annual turnover of over Rs 400 billion and create 25,000 direct and indirect jobs. The telecoms sector has brought in over $10 billion in foreign direct investment (FDI) to date and continues to do so in the form of license renewals, spectrum fees, etc.

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Commenting on NEPRA’s decision, Federal Minister of Information Technology and Telecommunications Syed Amin Ul Haque expressed concern, saying the right decision could benefit both consumers and the country’s national budget.

In a statement, he said the telecom sector had been granted industry status by the government. “We believe it is the right of telcos to receive electricity rates at industrial rates.”

Haque said the matter is not just limited to the telecom sector, but can be an important step in providing consumers with better facilities and attracting foreign investors.

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