Pakistan should subsidise smartphones for 4G access, says Telenor CEO

Pakistan should subsidise smartphones for 4G access, says Telenor CEO

Telenor Pakistan’s CEO Irfan Wahab Khan has called for the country’s government to offer subsidised smartphones to expand high-speed connectivity among Pakistani consumers.

Since 4G-enabled smartphones are typically too expensive for many consumers, Khan’s concern is that users are being priced out of connectivity. He argues that the country’s Universal Services Fund (USF), worth around PKR100 billion ($950 million), could be used to provide devices.

The USF was set up several years ago to improve the standard of living in Pakistan, and is funded by operators contributing 1.5% of their revenue. Khan notes that enabling access to faster internet has proven benefits, saying that the government should consider using the fund “for spreading and expanding telecom services including broadband for sustainable economic development, especially in remote and rural areas”.

Speaking at the 17th ITCN Asia Conference, Khan argued that if the government “can provide subsidised handsets like Malaysia’s [former prime minister] Mahathir Mohamad did to digitalise Malaysia” then “internet penetration may reach 50% of the population in the next two years. We are aiming to provide internet to 80% of the population in the long run.”

The initiative in Malaysia proved successful enough to inspire India’s Prime Minister Narendra Modi to attempt a similar move. Khan noted that in Pakistan, only around 20% of the population is using mobile internet, although Asif Aziz, CCO of market leader Jazz, has claimed that by 2020 the operator would extend its 4G coverage to 70% of the population.

The cost of devices is not the only impediment to internet access, however. The Pakistan Telecommunication Authority’s chairman Syed Ismail Shah noted that higher tax rates for mobile services were proving a deterrent to adoption – despite the government’s pledge in May to offer tax breaks to the industry that will reduce tariffs and duties on both services and devices. The breaks will not affect high-end smartphones however, which will retain their tax duty of PKR1,500.

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