Call Volumes Drop Following Tax Rises in Pakistan

Mobile operators in Pakistan have all seen an 8 to 9 percent drop in call volumes following a recent rise in taxes imposed by the government on PrePay tariffs.

"We have witnessed decreased usage of mobile phone in terms of decreased minutes and mobile subscribers. It can easily be estimated that there is reduction in usage by 8 to 9 per cent after announcement of unfair taxation," sources in cellular companies told The News in Islamabad.

At the moment, purchasers of Prepay SIM cards have to pay an upfront 10 percent income tax on the card. In addition to the 10 percent upfront deduction - calls and text messages will now be subjected to a 21 percent Federal Excise Duty.

"Mobile industry invested over $6 billion in last four years and its share in overall investment stood at 66%," said UfoneÃ's Chief Marketing Officer (CMO) Aasher Yaqoob and expressed his apprehensions that the industryÃ's growth would be affected negatively in such a condition.

Last month, the Pakistan Telecommunication Authority (PTA) also announced a reduction in the Mobile Termination Rates (MTR) with effect from 1st June 2008 by about 30%.

According to figures from the Mobile World database, the country ended the first quarter of this year with some 82.5 million subscribers - representing a population penetration level of 48%. In common with many developing nations, the vast majority of the subscribers are using PrePay tariffs.

On the web: The News - Mobile World

Posted to the site on 15th July 2008