The Pakistan
2nd Nov., 2000
S.R.O. 847 (I)/2000.—
In exercise of the powers conferred by section 57 of the Pakistan
Telecommunication (Re-organization) Act, 1996 (XVII of 1996), the Federal
Government is pleased to make the following rules:---
PART I - GENERAL
1.
Short title, extent and commencement.- (1) These rules may be called the
Pakistan Telecommunication Rules, 2000.
(2) They shall come into force at
once.
2.
Definitions.- (1) In these rules, unless there
is anything repugnant in the subject or context,---
(a) “Act” means
the Pakistan Telecommunication (Re-organization) Act, 1996 (XVII of 1996);
(b) “applicant”
means any person, class of persons, company or corporation which applies for a
licence under the Act and these rules;
(c) “connectable
system” means a licensed telecommunication system, whether or not a public
switched network, the licence for which authorizes its connection to another licenced
system;
(d) “designated
operator” means any operator who contributes to the development of the
telecommunications market in Pakistan by improving the quality, efficiency or
speed or method of communications but excluding any operator (i) who offers
simple resale services; or (ii) who does not control access to customers by way
of numbers allocated to it by the Authority or by switching capabilities;
(e) “effective
date” means the date of coming into force of these rules;
(f) “exclusivity
period” means the period of seven years commencing on the 1st January,
1996, and ending on the 31st December, 2002;
(g) “exempted person”
means a person establishing, maintaining or operating any telecommunication
system which does not require a licence by virtue of proviso to sub-section (1)
of section 20of the Act;
(h) “interconnection”
means the physical and logical connection of two operator’s connectable systems
thereby allowing customers of one system to connect with customers of the other
system, or to access telecommunication services provided from the other system;
(i) “interconnection
agreement” means an agreement between two operators relating to
interconnection services;
(j)
“interconnection services”
means telecommunication services for the purpose of the conveyance of
intelligence between two connectable systems and including any ancillary
services which an operator has requested from another operator and in respect
of which that other operator is obliged to enter into an agreement with the
operator to provide in accordance with Part III of these rules;
(k) “licenced
telecommunication system” means the telecommunication system for which a
licence has been granted in accordance with the provisions of the Act and these
rules;
(l) “LRIC” means long run incremental costs, where as “incremental
costs” means average forward looking additional costs incurred by the provision
of interconnection services and “long run costs” includes all elements of costs
including, without limitation, operating and capital costs;
(m) “Network
Connection Equipment” in relation to any telecommunication system, means an
item of telecommunication equipment comprised in that telecommunication system
which is not terminal equipment and which is used to provide interconnection
with another telecommunication system;
(n)
“Network Connection Point” means any
point within an item of Network Connection Equipment comprised in one
telecommunication system at which signals are conveyed to, or from, a
corresponding point in another item of Network Connection Equipment comprised
in another telecommunication system;
(o) “operator”
means any person authorized by a licence to run a connectable system;
(p) “person”
shall include a company or a corporation;
(q) “Regulatory
Accounts” shall have the same meaning as are given to it in the licence
granted to a company; and
(r)
“SMP operator” means any operator
which has, as determined by the Authority in accordance with sub-rule (1) of
rule 17, significant market power.
(2)
The words and expressions used herein but not defined shall have the same
meaning as are respectively assigned to them in the Act.
PART II - LICENSING
3.
Application for grant of a licence.- (1) No licence to provide basic
telephone service may be granted, but applications may be made for the
establishment, maintenance and operation of any telecommunication system or the
provision of any telecommunication service other than basic telephone service.
(2) An
application for the grant of a licence to operate any telecommunication system
or provide any telecommunication service shall be made in the form set out in
Appendix ‘A’ to these rules.
(3) An
application under sub-rule (2) shall be made in duplicate and shall be
addressed to the Chairman of the Authority.
(4) An
application under sub-rule (2) shall, where applicable, be accompanied by the
documents and details of information set out in Form I.
(5) An
application under sub-rule (2) shall be accompanied by the payment of fees in
the amount prescribed in accordance with the conditions for each type of
licence to be issued.
(6) An
application under sub-rule (2) may be withdrawn at any time before the grant of
a licence.
4.
Conditions and criteria for grant of a licence.- (1)
The Authority may grant licence to an individual, class of persons, company or
corporation.
(2)
Except for the licence granted to the Company for basic
telephone service, no licence shall confer exclusive
rights.
(3)
Applications shall be considered on their individual merits
and in determining whether or not to grant a licence, the Authority shall take
into account the following factors, namely:---
(a)
the financial and economic viability of the applicant;
(b)
the applicant’s experience in telecommunications and
relevant past history;
(c)
the technical competence and experience of the applicant’s
management and key members of staff and local participation in the business;
(d)
the nature of the services proposed and the viability of the
applicant’s business plan including the applicant’s proposed roll-out and
service quality commitments and its contribution to the development of the
telecommunications sector;
(e)
the quality of the applicant’s telecommunications system or
network; and
(f)
the terms of bid made by the applicant where the licence is
to be issued under a competitive process.
(4) The
Authority may, if it is satisfied that there are any factors in relation to
that application which threaten or potentially threaten national security,
reject an application.
5.
Procedure for grant of a licence.- (1) On receipt of an application for
grant of licence, the Authority shall fix a date for a hearing to which the
applicant shall be invited by the Authority to attend for the purpose of
examining the applicant’s requirement for grant of a licence to establish,
maintain and operate a telecommunication system or provide a telecommunication
service and the Authority shall give the applicant not less than ten
days’ prior written notice of the date of the hearing.
(2)
If the applicant, or its duly authorized
representative, fails to appear before the Authority on the date fixed for the
hearing, it may proceed to examine the application on the basis of information
and documents provided with the application and may decide to grant the licence
on the basis of information provided or may decide to reject the application if
it determines that the information provided with the application is incomplete
or inadequate with regard to the telecommunication system or telecommunication
service proposed by the applicant.
(3) At the
hearing on the date fixed under sub-rule (1), the applicant may submit
additional information as may be required by the Authority to justify the grant
of the licence applied for.
(4) The Authority
shall examine the applicant’s requirement for grant of a licence and shall
inform the applicant in writing of the status of the application within one
hundred and twenty days from the date of submission of the application.
(5) Notwithstanding
anything contained in sub-rule (4), if an applicant has provided all material
information and the application is otherwise complete in respect of all
documents required to be filed with the application, the Authority shall give
detailed reasons for its rejecting the application.
(6)
Any applicant aggrieved by the decision of the Authority
may, within thirty days from the date of order, prefer appeal to the Authority
under sub-section (2) of section 7 of the Act in accordance with the provisions
of part V of these rules.
6.
Rights granted to the licensee.- (1) A licensee shall have the right
to establish, maintain and operate a telecommunication system in the territory
and for the period stipulated by the Authority in the licence, in accordance
with the provisions of the Act and these
rules.
(2) A licensee
shall have the right to provide a telecommunication service in the territory
and for the period stipulated by the Authority in the licence in accordance
with the provisions of the Act and the rules made thereunder.
7.
Conditions of licence.- (1) A licence granted under these
rules shall be subject to the Act and these rules.
(2) The following
shall be the conditions of licence for provision of basic telephone service,
namely:---
(a) the exclusivity
period shall be subject to conditions as have been specified in the licence
issued by the Authority to the Company; and
(b) after the expiry of
the exclusivity period, the conditions of licence for the provision of basic
telephone service shall be notified by the Authority by publication in the
official Gazette.
(3)
A licence granted in accordance with the provisions of the
Act and these rules shall be subject to the restrictions on transfer of the
licence and on change of ownership of the licensee and such further
restrictions as are contained in rule 11.
(4) A
licence granted in accordance with the provisions of the Act and these rules
shall be subject to the conditions applying to all licensed services contained
in Appendix ‘B’ to these rules.
8. Duration and renewal of
licence.- (1) Subject to the Act and these rules, a licence shall be
granted for an initial term of not less than twenty-five years. Subject to
sub-rule (2) and rule 9, after the expiry of the initial term, the licence
shall be renewed on terms and conditions consistent with the policy of the
Federal Government at the relevant time.
(2) If the
licence is not to be renewed, the Authority shall serve a written notice on the
licensee of at least one fourth of the initial licence term and that notice
shall terminate the licence on the expiration of the initial term.
9.
Monitoring of compliance, enforcement and early termination.-
(1) The Authority may monitor compliance by licensees with their licences in
accordance with the terms of their licences and the Act.
(2) If the
Authority considers, whether or not as a result of any complaint or made by
another person as a result of monitoring by the Authority, that the licensee
has contravened any condition of the licence, the Authority may serve a written
notice requiring the licensee to show cause, within thirty days after the date
of the notice, as to why an enforcement order should not be issued.
(3) If the
licensee appears before the Authority to give an explanation, or submits a
written explanation to the Authority, within the period specified in sub-rule
(2), to the satisfaction of the Authority, the enforcement order shall not be
issued.
(4) If the
licensee fails to respond to the notice referred to in sub-rule (2) or
satisfy the Authority in respect of the alleged contravention in accordance
with sub-rule (3), the Authority may issue an enforcement order requiring the
licensee to remedy the contravention within such period, which shall be less
than thirty days from the date of service of the enforcement order, as the
Authority may reasonably consider appropriate.
(5) If the
licensee fails to comply with the enforcement order served under sub-rule (4),
the Authority may, by further enforcement order in writing hereinafter referred
to as “final order”:---
(a) levy a fine
which may extend to three hundred and fifty million rupees; or
(b) in the case of
a grave or persistent contravention of its licence, require the licensee to
cease that contravention within such further period of time, not being less
than thirty days from the date of service of the final order, as the Authority
may reasonably consider appropriate, failing which the Authority may take
action under sub-rule (6) in respect of such contravention.
(6)
Subject to sections 23 and 24 of the Act,
the Authority may terminate the licence on service of not less than thirty days
a notice in writing to the licensee if the licensee:---
(a) commits a grave, or
persistent, contravention of its licence and fails to comply with a final order
which order has not been set aside by, or is not the subject of any appeal or
other proceedings before any court, the Authority or the Federal Government as
referred to in section 7 of the Act, served in respect of that contravention
within the period specified in that order, or any longer period allowed to the
licensee by the Authority;
(b) fails to pay any
overdue fee under the licence, which fee is not the subject of any dispute in
good faith between the licensee and the Authority and in respect of which any
appeal or proceedings have been initiated by the licensee, within sixty days
following service on the licensee of written notice requiring payment together
with a written warning that action will be taken under this sub-rule if the
contravention is not remedied within the period specified in the notice; or
(c) becomes insolvent
or if a receiver is appointed in respect of a substantial part of the assets
used by the licensee for undertaking activities under the licence.
10.
Modification of the licence.- (1) Subject to the provisions of the
licence, the Authority and the licensee may, at any time, by mutual consent,
modify or add further conditions to the licence.
(2) The modifications
proposed by the Authority shall subject to, and in accordance with, section 22
of the Act.
11.
Transfer of license and ownership of licensee.- (1)
A licence granted under the Act and these rules shall be personal to the
licensee and shall not be assigned, sub-licensed to, or held on trust for any
person, without the prior written consent of the Authority.
(2)
Subject to sub-rule (3), the licensee may not, without the
prior written permission of the Authority, through any sale or pledge of, or
mortgage or charge over, any of its licensed telecommunication system, through
contract or otherwise, render itself incapable of performing any of its
obligations under its licence provided that the Authority’s permission shall
not be required where the licensee creates a charge over any of its assets to
secure repayment of a loan or any other financing facility obtained in the
normal course of business.
(3)
If, pursuant to sub-rule (2), the licensee is required to
obtain the permission of the Authority, then it shall furnish to the Authority
all such documents and information as the Authority may consider necessary to
enable the Authority to make a determination as to whether permission should be
granted or not. On receipt of requisite documents and information, the
Authority may grant permission to the licensee for the proposed sale or pledge
of, or mortgage or charge over, any specified part `of the licensee’s licensed
telecommunication system either unconditionally or subject to such conditions
as the Authority may deem appropriate to protect the interests of the consumers
using the licensee’s telecommunication services.
(4)
A permission given by the Authority under sub-rule (3) shall
include the requirement that the licensee shall take all necessary action to
ensure the continuous and uninterrupted use of that part of the licensee’s
licensed telecommunication system being sold, pledged, mortgaged or charged.
(5)
If a substantial ownership interest in, or control of, a
licensee is proposed to be changed, the licensee shall give the Authority
notice of such fact in writing. That written notice shall include all relevant
details of the proposed change. If the Authority is of opinion, that
change shall adversely affect the ability of the licensee to provide its
licensed telecommunication services, it may impose such additional conditions
in the licence as shall be reasonable and directly relevant to the proposed
change.
Explanation.- For the purpose of sub-rule (5):---
(i) “control”
means the ability to direct the exercise, whether directly or indirectly and
whether through one or more entities, of more than fifty percent of the voting
rights exercisable at any general meeting of the shareholders of the licensee;
and
(ii) “substantial
ownership interest” means more than ten percent of the issued share capital
of the licensee.
(6) The
Federal Government may terminate the licence on service of not less than thirty
days written notice to the licensee if, in the opinion of the Federal
Government, the transfer of control threatens or potentially threatens national
security
(7) Any
modifications to the licence pursuant to sub-rule (3) or (5) shall be made only
in accordance with the provisions for modifications of licence contained in
section 22 of the Act and rule 10.
12.
Compliance with rules.- (1) Licences issued
prior to the coming into force of these rules shall be submitted to the
Authority within ninety days from the effective date.
(2) If the
Authority, on reviewing the license referred to in sub-rule (1), is satisfied
that the licence had been validly issued and complies substantially with the
provisions of these rules, the Authority shall, within one hundred and eighty
days from the effective date, issue an order in writing stating that the
licence is substantially in compliance with the provisions of these rules and
shall be valid for the remainder of its term.
(3) If the
Authority determines that the licence does not substantially comply with the
provisions of these rules, the Authority shall by an order in writing within
one hundred and eighty days from the effective date, notify the licensee in
writing of those terms and conditions of the licence which are not in
compliance with these rules and at the same time shall direct the
licensee to make an application for a new licence in accordance with the
provisions of these rules.
(4) If an
application for a new licence is not submitted within ninety days from the date
of the order referred to in sub-rules (3), the existing licence shall be deemed
to have expired at the expiration of the ninety day period.
PART III -
INTERCONNECTION
13.
Interconnection between connectable systems.- (1) Each operator hereinafter referred to as the “relevant
operator”, shall, on the request of another operator, negotiate an
agreement to interconnect that other operator’s telecommunication system to its
telecommunication system.
(2)
The relevant operator shall make reasonable endeavours to provide to the other
operator a point of connection at the switches requested by the other operator
in a manner which shall be agreed from time to time between the relevant
operator and the other operator and which duly takes account of what is
technically feasible given the functionality of the respective networks of the
relevant operator and of the other operator from time to time.
(3)
Network Connection Equipment, where reasonably practicable, shall, if requested
by an operator, be located within the same space in order to maximise the
efficient use of space in the relevant operator’s premises and to minimise the
cost and inconvenience to the relevant operator and the other operator. If the
relevant operator demonstrates that physical co-location is not reasonably
practicable, the relevant operator shall, if requested, instead offer
interconnection on terms equivalent to physical co-location in terms of
economic, operational and technical conditions by a date as soon as reasonably
practicable which shall be agreed between the relevant operator and the other
operator. All costs associated with the provision of equipment and space
by the relevant operator in satisfaction of these requirements shall be
included in the charges permitted under rule 16.
(4)
A relevant operator shall enter into an interconnection agreement with another
operator within ninety days from the request from that other operator.
Interconnection pursuant to any interconnection agreement shall be carried out
as soon as practicable but, in any event, within thirty days from the date when
that agreement is entered into.
(5)
The relevant operator and the other operator shall comply with all relevant
international standards, including, without limitation, those of
the International Telecommunication Union.
(6)
The terms and conditions of interconnection agreements shall be those agreed to
between the relevant operator and the other operator. All interconnection
agreements shall include, inter alia:---
(a)
the points in the telecommunication system of the relevant operator at which
connections are made;
(b)
the interfaces and their standards and specifications;
(c)
procedures for ensuring telecommunication system and telecommunication service
standards including maintenance;
(d)
interoperability tests;
(e)
traffic management and forecasting;
(f)
confidentiality provisions;
(g)
interconnection charges and their evolution or revision over time;
(h)
terms of payment and billing procedures;
(i)
a minimum duration period of at least twelve months;
(j)
a provision that the interconnection agreement may only be altered by mutual
consent of the parties or through a determination of the Authority under
sub-rule (10);
(k)
procedure for requesting and agreeing new Network Connection Points or capacity
upgrades at existing Network Connection Points;
(l)
notification of maintenance work and alteration or adaptations of the
telecommunication system of one party affecting the interconnection with the
other party; and
(m)
an obligation, where the Company is a party to the interconnection
agreement, on the other party not to carry out any activity in violation
of the exclusive rights of the Company during the exclusivity period.
(7)
If the relevant operator and the other operator cannot agree on the terms and
conditions of the proposed interconnection agreement within sixty days after
the request for such interconnection, either party may refer the matter to the
Authority by notice in writing.
(8)
The Authority shall fix a date for a hearing to be held not later than
thirty days from the date of receipt of the notice under sub-rule (7) or
(12) and shall notify that date to the parties by notice in writing at least
seven days prior to that date. The notice shall require the parties to attend
the offices of the Authority at the time and on the date specified in the
notice and shall require each party to submit a written statement of the
understanding reached between it and the other party to date at least three
days before to the date of the hearing.
(9)
At the hearing held pursuant to sub-rule (8) the Authority shall give the
parties an opportunity to state their positions in respect of the matters as to
which they have been unable to reach agreement and shall provide them with
guidelines prepared by it under clause (h) of sub-section (2) of the section 5
of the Act. If the parties are able to reach an agreement as to the terms and
conditions of the proposed interconnection agreement the relevant operator and
the other operator shall, within fourteen days after the hearing, enter into an
interconnection agreement on those terms and conditions.
(10) If the
parties are unable to reach agreement as to the terms and conditions of the
proposed interconnection agreement at the hearing under sub-rule (8) or if the
parties fail to enter into an interconnection agreement within fourteen days
after that hearing if agreement as to the terms and conditions was reached
during that hearing pursuant to sub-rule (9), the Authority shall examine the
matter and may decide to hold another hearing hereinafter referred to as a
“final hearing” within thirty days. The Authority shall give the parties
at least seven days prior written notice of the final hearing at which the Authority
shall give the parties the opportunity to state their positions. After due
consideration of the submissions made by the parties at the hearing under
sub-rule (8) and, if appropriate, at the final hearing, the Authority shall
determine the terms and conditions on which the relevant operator and the other
operator shall enter into an interconnection agreement and notify those terms
and conditions in writing to them within thirty days after the date of the
hearing under sub-rule (8) or, if appropriate, the final hearing and such
determination shall be final and binding.
(11) When
determining the terms and conditions of an interconnection agreement under
sub-rule (10), the Authority shall take into account the following matters,
namely:---
(a)
the promotion of non-discrimination
between operators in similar circumstances providing similar services;
(b)
the promotion of competition;
(c)
relevant operators should allow
flexibility to the other operators as to the points of connection, manner of
conveyance of traffic and the routing of intelligence;
(d)
protection of the interest of
customers;
(e)
maintenance of the public switched
network and inter-operability of services; and
(f)
the relative market position of the
parties.
(12)
If a dispute arises between parties to an interconnection agreement in relation
to that interconnection agreement, then either party may refer the dispute to
the Authority who shall determine that dispute by written notice, within ninety
days after receipt of the notice in accordance with sub-rules (8) to
(11). The determination of the Authority shall be final and
binding. Neither party may refer a dispute to the Authority if the interconnection
agreement contains a reasonable, independent and legally binding dispute
resolution mechanism and any question as to whether such a mechanism is
contained within the interconnection agreement shall be determined by the
Authority following consultation with the parties to that interconnection
agreement.
(13)
All operators shall use their reasonable endeavours to amend any existing
interconnection agreements to conform to these rules as soon as practicable
after the effective date. For the avoidance of doubt, operators shall not
be treated to have contravened any portion of these rules if any such amendment
cannot be effected.
14.
Quality of service.- (1) Without
prejudice to the terms of any licence held by a relevant operator under the
Act, the quality of interconnection services provided by that relevant operator
shall be at least of the same standard and quality as comparable services
provided to the relevant operator’s own business including, without limitation,
in relation to price, quality and the timescale within which interconnection is
offered.
(2)
The relevant operator shall make reasonable endeavours to provide sufficient
points of connection and capacity at each point of interconnection to support
the grade of service reasonably required by the other operator to meet actual
and reasonably forecast demand for its telecommunication services.
15.
Provision of information.- (1) The
relevant operator and the other operator shall within thirty days after the
request for interconnection provide each other with relevant information
concerning the technical network aspects of their respective telecommunication
systems which is reasonably requested and necessary to enable points of
connection to be established together with information concerning any proposed
modifications or additions to their respective telecommunication systems
relevant to interconnection, and relevant to the operations of their respective
telecommunication systems relating to the proposed modifications or additions
to those systems.
(2)
Before providing any information under sub-rule(1), the relevant operator and
the other operator shall enter into a non-disclosure agreement to protect the
confidentiality of proprietary information of, and relating to, the other
party’s telecommunication network and operations provided under these rules for
the purposes of interconnection and shall use that proprietary information only
for that purpose.
(3)
Each relevant operator shall submit to the Authority any interconnection
agreements to which it is a party within seven days after entering into that
interconnection agreement. If an interconnection agreement to which a
relevant operator is a party is amended, that relevant operator shall submit
that interconnection agreement to the Authority within seven days after the
amendment has been made.
(4)
The Authority shall publish all interconnection agreements submitted to it in
such manner as it may determine. However, the Authority shall keep
confidential any sections of interconnection agreements, which are reasonably
notified by a party to the relevant interconnection agreement to the Authority
as containing information the disclosure of which would have the potential to
seriously and prejudicially affect its interests.
(5)
If the Authority determines that an interconnection agreement is not in
compliance with the Act, any rules or terms of a licence granted to an operator
which is a party to the interconnection agreement it shall notify the parties
to the interconnection agreement of its determination within sixty days after
the submission of the interconnection agreement to it or if the determination
follows a written notification by an operator to the Authority, within
sixty days after that notification. The Authority’s notification
shall set out the basis for the determination and require the parties to amend
the interconnection agreement within fourteen days. If the parties are unable
to reach agreement on the terms and conditions of an interconnection
agreement the determination of the Authority under sub-rule (10) of rule
13 shall apply.
(6)
The Authority may require any operator to submit to the Authority, in the
manner and at the times directed by the Authority, any information which the Authority
may reasonably require for the purposes of carrying out its functions under
these rules.
16.
Interconnection charges.- (1) Subject to
these rules, a relevant operator shall be entitled to fix different tariffs and
terms and conditions in respect of interconnection services for different
categories of operator and different categories of interconnection services
where those differences can be objectively justified on the basis of the costs
incurred in providing such interconnection services and which are approved by
the Authority from time to time.
(2)
A relevant operator shall be entitled to include within its interconnection
charges a monthly maintenance charge for interconnect links between its
telecommunication network and the telecommunication network of the other
operator.
(3)
Subject to these rules and the provisions of any licence held by it, an SMP
operator shall be entitled to charge for interconnection services:---
(a) to
designated operators on the basis set out in sub-rule (4); and
(b)
to all other operators on the basis of its prices for telecommunication
services provided by means of the public switched network.
(4)
The SMP operator’s interconnection charges shall, as soon as practicable, be
based on LRIC in the manner determined by the Authority and shall include a
reasonable rate of return on LRIC costs but the SMP operator shall not be
obliged to charge on the basis of LRIC until it has put in place the necessary
accounting and management information systems which shall enable it to do so in
accordance with a reasonable time table determined by the Authority. The
SMP operator shall also be entitled to recover a contribution to its common
costs in the manner determined by the Authority. For these purposes,
“common costs” means
costs that are incurred in connection with the production of multiple products
or services and remain unchanged as the relative proportion of those products
or services varies. Pending
the introduction of LRIC in accordance with this sub-rule the SMP
operator’s interconnection charges shall be based, as far as possible, on
cost-oriented interconnection charges for similar services provided by
telecommunication operators in other countries providing comparable telecommunication
services to those provided by the SMP operator.
(5) The SMP
operator shall, publish in the manner described in sub-rule (6), a notice
specifying the charges for interconnection services, or specifying the method
which is to be adopted for determining those charges, and other terms and
conditions on which it offers interconnection services.
(6)
Publications of the details referred to in sub-rule (5) shall be made by:---
(a) sending a copy
of the relevant details to the Authority on the day on which the charges shall
take effect; and
(b)
sending a copy of the relevant details to any operator who
reasonably requests a copy.
17.
SMP operators.-(1) An
operator shall be presumed to have significant market power when it has a share
of more than twenty-five per cent of a particular telecommunication
market. The relevant market for these purposes shall be based on sectoral
revenues.
(2)
The Authority may, notwithstanding sub-rule (1), determine that an operator
with a market share of less than twenty-five per cent of the relevant market
has significant market power. It may also determine that an operator with
a market share of more than twenty-five per cent of the relevant market does
not have significant market power. In each case, the Authority shall take
into account the operator’s ability to influence market conditions, its
turnover relative to the size of the relevant market, its control of the means
of access to customers, its access to financial resources and its experience in
providing telecommunication services and products in the relevant market.
PART IV - TARIFF
18.
Prices payable to the Company:- The fees and charges
hereinafter referred to together as the “Prices” shall be payable to the
Company for the telecommunication services listed in Schedule A to Appendix “C”
hereinafter referred to as the “Basket Services”, and in Schedule B
hereinafter referred to as the “Leased Circuit Services” set out in
Appendix “C” to these rules, which may be modified from time to time in
accordance with the provisions of the Act.
19.
Price control.- (1) The Company shall ensure that in
each consecutive twelve months period (t) hereinafter referred to as the “Price
Control Period”, the Prices charged for the Basket Services shall be fixed
so as to satisfy the criteria in the following formula, namely:---
Explanation:- For the purpose of sub-rule (1) the expression:---
(i.)
“CPI” denotes the consumer price index published by the
State Bank of Pakistan
(ii.)
“CPI t-1” denotes the geometric average level of the CPI for the
Price Control Period (t-1);
(iii.)
“CPI t-2” denotes the geometric average level of the CPI for the
Price Control Period (t-2);
(iv.)
“P it-1” denotes the geometric average Price of Basket Service
i in the Price Control Period (t-1);
(v.)
“P it” denotes the geometric average Price of Basket Service
i for the current Price Control Period (t);
(vi.) “W i”“ denotes the
revenues of Basket Service i in the latest financial year for which
Regulatory Accounts have been prepared by the Company as shown in those
Regulatory Accounts or, if no Regulatory Accounts have been prepared by the
Company, an estimate of those revenues in the latest financial year for which
it would have prepared Regulatory Accounts, as approved by the Authority;
(vii.) “W” denotes the
total revenues of all Basket Services in the latest financial year for which
Regulatory Accounts have been prepared by the Company as shown in those Regulatory
Accounts or, if no Regulatory Accounts have been prepared by the Company, an
estimate of those revenues in the latest financial year for which it would have
prepared Regulatory Accounts, as approved by the Authority;
(viii.) “X “t” denotes the
price control factor (the “Basket PCF”) determined by the Authority in
accordance with rule 20.
(2) A worked
example of the Price Control Formula is set out in Schedule ‘C’
to Appendix ‘C’ to these rules.
(3) The
Company shall ensure that in each consecutive twelve months’ period (t) the
Prices charged for Leased Circuit Services shall be fixed so as to satisfy the
criteria in the following formula hereinafter referred to as the “Leased
Circuit Price Control Formula”, namely:-
Explanation:- For the purpose this sub-rule the expression:---
(i.)
“CPI” denotes the consumer price indexpublished by the State Bank of
Pakistan
(ii.)
“CPI t-1” denotes the geometric average level of the CPI for the
Price Control Period (t-1);
(iii.)
“CPI t-2” denotes the geometric average level of the CPI for the
Price Control Period (t-2);
(iv.) “P it-1” denotes the geometric average Price of Leased Circuit Service i
in the Price Control Period (t-1);
(v.)
“P it” denotes
the geometric average Price of
Leased Circuit Service i for the current Price Control Period (t);
(vi.) “W I”“ denotes the revenues of Leased Circuit Service i in the
latest financial year for which Regulatory Accounts have been prepared by the
Company as shown in those Regulatory Accounts or, if no Regulatory Accounts
have been prepared by the Company, an estimate of those revenues in the latest
financial year for which it would have prepared Regulatory Accounts, as
approved by the Authority;
(vii.) “W” denotes the
total revenues of all Leased Circuit Services in the latest financial year for
which Regulatory Accounts have been prepared by the Company as shown in those
Regulatory Accounts or, if no Regulatory Accounts have been prepared by the
Company, an estimate of those revenues in the latest financial year for which
it would have prepared Regulatory Accounts, as approved by the Authority; and
(viii.) “Y t” denotes the
price control factor (the “Leased Circuit PCF”) determined by the
Authority in accordance with rule 20.
(4) The
Company shall ensure that in each Price Control Period (t), the price for any
individual Basket Service other than those specified in paragraphs 3(2) and
3(3) in Schedule A is not increased in real terms (based on the percentage change
in the geometric average level of the CPI from Price Control Period (t-2) to
Price Control Period (t-1)) by more than Z percent hereinafter referred to as
the “Maximum Price Rebalancing Rate”.
(5) The
Company shall take all reasonable steps to ensure that, in each Price Control
Period (t), the price for any individual Basket Service specified in paragraph
3(2) in Schedule A to Appendix ‘C’ is not increased by more than the percentage
change in the ER from Price Control Period (t-2) to Price Control Period
(t-1) plus the Maximum Price Rebalancing Rate. In this rule, the expression
“ER”, in any Price Control Period, means the geometric average level of the
exchange rate from Rupees to US$ (as published by the State Bank of Pakistan)
over that Price Control Period.
(6) The
Company shall be free, within the restriction imposed under this rule, to
change the prices charged for Basket Services or Leased Circuit Services at any
date and any frequency but, during the exclusivity period, the Company shall
not increase those prices more frequently than once in any twelve month period.
(7) For the
avoidance of doubt, it is clarified that this rule does not restrict the fees
and charges payable to the Company for telecommunication services which are not
Basket Services as amended from time to time in accordance with these rules or
Leased Circuit Services.
20.
Price Control Factors.- The Basket PCF and the Leased
Circuit PCF and the Maximum Price Rebalancing Rate shall be determined by the
Authority for each period of four years. In respect of each Price Control
Period comprised in the four years commencing on the 1st July, 1999, the Basket
PCF and the Leased Circuit PCF shall be as set out in Schedule ‘D’ to Appendix
‘C’ to these rules and the Maximum Price Rebalancing Rate shall be as set out
in sub-rule (4) of rule 4 and the said Schedule ‘D’. The Basket PCF and
the Leased Circuit PCF and the Maximum Price Rebalancing Rate for each Price
Control Period comprised in each subsequent period of four years shall be
determined by the Authority no later than six months before each
subsequent period of four years commences.
21.
Carry forward and restatement of CPI.- (1) To the
extent that the Company has, during any Price Control Period (t), provided that
the Prices are below those necessary for compliance with rule 19, then the
difference between the factor by which those Prices increased from Price
Control Period (t-1) to Price Control Period (t) and the factor by which the
prices could have increased under rule 19 over that period may be carried
forward to all or any of the immediately following two Price Control Periods
such that prices in all or any of those Price Control Periods, without
prejudice to the application of the Price Control Formula or Leased Circuit
Price Control Formula for those Price Control Periods, can be increased to take
account of that difference to the extent not taken into account in any previous
Price Control Period.
(2) If the
CPI is restated by the State Bank of Pakistan in respect of any twelve
months’ period such that the difference between the factors by which Prices
could be increased in respect of the relevant Price Control Periods before and
after the restatement is, in the opinion of the Authority, material, it shall
consider whether that difference shall be carried forward to subsequent Price
Control Periods such that Prices in all or any of those Price Control Periods,
without prejudice to the application of the Price Control Formula or Leased
Circuit Price Control Formula for those Price Control Periods, can be increased
or decreased to take account of that difference to the extent not taken into
account in any previous Price Control Period.
22.
Changes to the Basket Services.- (1) Subject to sub-rules (2) and
(3), the Company shall be entitled to add or replace a telecommunication
service in respect of the Basket Services only if that telecommunication
service is either:-
(a)
wholly or substantially in substitution of an existing
telecommunication service; or
(b)
a packaged offering of existing telecommunication services
or of elements of existing telecommunication services.
(2)
The Company shall notify to the Authority in writing of its
intention to add or replace a telecommunication service in respect of the
Basket Services pursuant to sub-rule (1) together with the proposed basis on
which the Price Control Formula shall apply to that telecommunication service
not later than thirty days in advance of the Price Control Period in which it
proposes to implement that change to the Basket Services.
(3) For the
avoidance of doubt, it is clarified that the Company shall be free to introduce
any number of different packages of prices for packages of existing
telecommunications services that it wishes, provided that all such Prices
comply with these rules.
(4) The
Authority may, in its absolute discretion, accept or reject the proposed basis
on which the Price Control Formula shall apply to that telecommunication
service. The Authority shall inform the Company in writing of its acceptance or
rejection of the changes to the Basket Services proposed by the Company
pursuant to sub-rule (1) within one month from being notified in accordance
with sub-rule (2).
23.
Sales or value added taxes.- Prices set pursuant to these rules
are exclusive of any sales or value added tax including any Central Excise
Duty, which may be levied under the relevant law in addition to the Prices.
24.
Publication of Prices.-The Company shall publish and notify
to the Authority of its prices in accordance with the provisions of its
licence.
(1) The Authority may disapprove the proposed prices only if
such prices:---
(a)
contain material mathematical errors; or
(b)
violate applicable laws, rules or the terms of any
telecommunication licences held by the Company.
(3) If the
Authority does not deliver to the Company a written disapproval of the proposed
prices containing full reasons for the disapproval at least ten days in advance
of the day on which the proposed Prices are to become effective, then the
prices shall be deemed to be approved.
25.
Uniformity of Prices.- The Company shall not show undue
preference to, or exercise undue discrimination against, particular persons or
classes of persons in respect of the prices charged by it for telecommunication
services and shall not in particular, charge different rates for customers in
rural areas than those charged to similar customers in similar situations in
urban areas.
(2) The
Company may charge different prices in respect of calls terminating on a fixed
line compared with calls terminating on a mobile line only to the extent that
changes have been made to the interconnection regime to reflect the principle
that calling party pays. The permitted differential under this sub-rule
shall be determined by the Authority after consultation with the Company.
When the interconnection regime fully reflects the principle that calling party
pays then this sub-rule shall cease to apply.
Appendix ‘C’
[See rules 18, 19(2) and 20]
THE SCHEDULE ‘A’
Basket Services
The following components of basic
telephone service shall be comprised in the Basket Services, namely:---
1.
Installation services
(1)
The installation and bringing into service of connections to
the public fixed switched network for residential customers.
(2)
The installation and bringing into service of connections to
the public fixed switched network for business customers.
2.
Line rental services
(1)
The provision and maintenance of connections to the public
fixed switched network for residential customers.
(2)
The provision and maintenance of connections to the public
fixed switched network for business customers.
3.
Call services
(1) Calls made
over the public fixed switched network from Customer Premises Equipment or
Public Payphones to Customer Premises Equipment, Public Payphones or to
equipment connected to a public mobile switched network within Pakistan
(2) Outgoing
international calls, being calls made over the public fixed switched network
from Customer Premises Equipment or Public Payphones to the public switched
network of an operator in another country.
(3) Incoming
international calls, being calls made over the public fixed switched network
from the public fixed switched network of an operator in another country to
Customer Premises Equipment, Public Payphones or to equipment connected to a
public mobile switched network.
(4)
Directory information services.
4.
Other mandatory services
Any
other service that the Company requires its customers to acquire from it in
order to receive or continue to receive any of the services described in
paragraphs 1, 2 and 3 of this Schedule.
5.
Excluded services
The following services are not
included in the Basket Services, namely:---
(i.)
Interconnection Services;
(ii.)
basic telephone service calls originating on a public mobile
switched network;
(iii.)
the supply of Customer Premises Equipment;
(iv.)
the installation, bringing into service, provision and
maintenance of Leased Circuits; and
(v.)
services that are eliminated from the Basket Services from
time to time in accordance with the provisions of rule 22.
THE SCHEDULE ‘B’
[See rule 18]
PART FOUR (TARIFF)
Leased Circuit Services
The following services shall be
comprised in the Leased Circuit Services, namely:---
1.
Installation services
The installation and bringing into
service of all types of Leased Circuits.
2.
Line rental services
The provision and maintenance of all
types of Leased Circuits.
THE SCHEDULE ‘C’
[See rule 19(2)]
Price Control Formula Worked Example
For Basket Services
|
|
|
|
|
Total
|
Installations
|
Monthly rentals
|
Local calls
|
NWD calls
|
Outgoing international calls
|
Incoming international settlements
|
|
1
|
W(i)
|
1999/2000
Revenues (excluding CED)
|
Rupee
|
59,069
|
1,328
|
7,662
|
15,430
|
9,101
|
5,827
|
19,720
|
|
2
|
W(i)/W
|
Revenue
weights
|
%
|
|
2%
|
13%
|
26%
|
15%
|
10%
|
33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
P(i,t-1)
|
1999/2000
Price (excluding CED)
|
Rupee
|
|
4,390
|
204
|
1.83
|
11.60
|
58.30
|
27.40
|
|
4
|
P(i,t)
|
2000/2001
Price (excluding CED)
|
Rupee
|
|
4,785
|
247
|
2.05
|
11.27
|
52.74
|
24.79
|
|
5
|
(4
- 3) / 3
|
Individual
price change
|
%
|
|
9%
|
21%
|
12%
|
-3%
|
-10%
|
-10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
2
x 5
|
Weighted
average price change
|
%
|
1.5%
|
0.2%
|
2.7%
|
3.1%
|
-0.4%
|
-0.9%
|
-3.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
CPI(t-2)
|
CPI
1998/1999
|
|
204.0
|
|
|
|
|
|
|
|
8
|
CPI(t-1)
|
CPI
1999/2000
|
|
222.4
|
|
|
|
|
|
|
|
9
|
8
/ 7 – 1
|
Change
in CPI
|
%
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
X(t)
/ 100
|
Basket
PCF
|
%
|
7.5%
|
|
|
|
|
|
|
|
11
|
9
– 10
|
Maximum
allowed basket price increase
|
%
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
Z(t)
/ 100
|
Maximum
price rebalancing rate
|
%
|
|
0%
|
12%
|
3%
|
0%
|
|
|
|
13
|
9
+ 12
|
Maximum
allowed individual price increase
|
%
|
|
9%
|
21%
|
12%
|
9%
|
|
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