KARACHI: Mobile phone calls are likely to cost less in Pakistan as the regulator has issued consultation papers, proposing up to 20 paisa per minute cut to the Mobile Termination Rates (MTR). The lower rates are likely to come into force from December 1, 2017. The MTR is defined as the price charged by an operator for forwarding calls from other network customers to their own customers. Similarly, the MTR is the price that a cellular mobile operator (CMO) charges to another operator for terminating off-net calls on its network. The proposed cut in the MTR will not only reduce the tariffs of fixed to mobile phone calls but will also provide direct incentives to mobile operators to further reduce their call rates. The Pakistan Telecommunication Authority (PTA) has initiated the review process, seeking public and stakeholders’ comments on the issues raised in the consultation paper. The PTA said that it had been receiving requests from telecom operators to review the existing the MTR, while it was also observed that current MTR of Rs 0.90 in Pakistan was around 110 percent higher than the mean MTR benchmark and was around 198 percent higher than the median benchmark. The benchmarking analysis undertaken in the consultation paper shows that the MTR calculated for Pakistan is between Rs 0.30 to Rs 0.43 per minute as per PPP adjustment. Therefore, the regulator has proposed determination of the MTR in Pakistan at Rs 0.80 per minute from December 1 to November 30, 2018, and Rs 0.70 per minute from December 1, 2018, onwards, as an interim measure. In this connection, the PTA will undertake cost-based study to review and determine termination rates as per the Telecommunication Policy 2015. The PTA said that reduction of the MTR would help operators offer better off-net call rates and reduce the current differentials of on-net and off-net rates. “Reduction in the MTR is also expected to reduce grey traffic as it will decrease incentive for illegal termination,” it added. Earlier, the PTA had determined MTR of Rs 2.20 per minute with effect from December 1, 2000, after the Implementation Calling Party Pays (CPP) regime. Later on, the rate was revised to Rs 2 per minute in 2002 on the basis of international benchmarking for a period of two years. In July 2005, the PTA determined fixed-to-mobile and mobile-to-mobile interconnection charges on the basis of Fully Allocated Cost (FAC) and international benchmarking. In 2006, PTA engaged services of a renowned consultancy firm, Ovum Plc, for determination of interconnection charges on the basis of Bottom-up Long Run Incremental Cost (LRIC) and Top down Fully Allocated Cost (FAC). Based on the study results, the PTA issued determination on MTR, wherein it was reduced to Rs 1.10 per minute from June 2008 to December 2008, Rs 1 per minute from January 2009 to December 2009 and Rs 0.90 per minute from January 2010. Published in Daily Times, September 30th 2017.