Telenor Pakistan issues 3G threat

Telenor's Pakistani unit has threatened not to participate in the nation's upcoming 3G auction, due to decisions by the government to significantly increase taxes and regulation on the sector.

Telenor Pakistan CEO Lars Christian Luel told the nation'sExpress Tribune that increased taxes and a higher regulatory burden on operators would affect the profitability of 3G, and force Telenor to reconsider making investments in the country.

The government has decided to increase the withholding tax on mobile services by 5% to 15% for the new financial year - on top of the 19.5% federal excise duty customers pay on their services.

The government has also recently increased its target for the 3G auctions to $1.2 billion, from $800 million. Luel said this represents wishful thinking considering the government's plan to impose so much tax on the sector.

Luel also argued that new regulatory requirements are making the Pakistani market less attractive to international investors, and complained that the government has taken money away from the Universal Services Fund, contravening existing telecom regulation.

In nearby Bangladesh, telecom regulator BTRC approved Bharti Airtel's plannedbuyout of Airtel Bangladeshfollowing a review.

Airtel is buying Warid Pakistan's 30% stake in Airtel Bangladesh – the fourth largest mobile operator in Pakistan – for $80 million.

The regulator also announced it has selected 159 more entities to receive VoIP service provider licenses (VSPs).

The companies will now have 30 days to pay a license acquisition fee of 500,000 taka ($6410), and will be charged a 15% tax on revenues.

The latest allocation brings the total number of active VSPs to just over 1,000. The regulator has been trying to crack down on the number of VoIP calls being processed daily without a license.

But Muazzem Hossain, convener of local VoIP industry body BAVSP, told theDhaka Tribune she fears that the market already has too many licenses, and further allocations may lead to mismanagement.