Pakistan’s Telecom Sector Reacts to 300% Increase in Router Prices

The Telecom Operators Association (TOA) has expressed strong disapproval of a 300 percent increase in the cost of fibre broadband routers. They argue that this significant price hike contradicts the government’s Digital Pakistan Vision and poses a threat to the expansion of internet access across the country.

The TOA stated in a letter sent to the FBR and the Ministry of IT and Telecoms that the customs department’s established valuation is implausible.

According to the organization, optical network terminals (ONTs) with RF (cable TV) ports are now priced at $165 per unit, while ONTs that simply have Wi-Fi connectivity are priced at $44. This hike is a result of Valuation Order No. 1931/2024, which was issued by Pakistan Customs.

Impact on Fiber Broadband Providers

Many fibre broadband providers, including PTCL, Nayatel, Cybernet, and Transworld, use these ONTs exclusively.

The telecom industry disagrees with the valuation determination, saying it is arbitrary and doesn’t take into account real import invoices or market prices. According to the TOA, ONTs cannot be made in the country and must be imported from companies like Huawei, ZTE, and Fibrehome at prices that are in line with global standards.

TOA’s Concerns Over High Valuation

The association expressed dissatisfaction that the customs administration had disregarded their submissions and imposed an excessively high valuation. There is no technological correlation between RF ports and Wi-Fi speeds, but the customs administration is mistakenly allocating separate fees based on Wi-Fi generations (Wi-Fi 4, 5, 6, and 7). This further complicates issues, it noted.

A member of the TOA voiced concern that broadband expansion initiatives would be hampered by inflated internet equipment costs caused by high import expenses.

The telecom industry is concerned that a sudden increase in ONT pricing would make the internet unaffordable for residential customers and slow down the rollout of fibre-to-the-home (FTTH) networks in this country. This could slow down the spread of broadband, which goes against the government’s aim to increase high-speed internet access nationwide.

In order to guarantee a reasonable, market-based valuation, the TOA demanded that the IT ministry promptly resolve the matter with the FBR. Industry experts think that the government, Pakistan Telecommunication Authority (PTA), and Pakistan Electronic Media Regulatory Authority should have been involved in the valuation process to make better decisions.

To avoid arbitrary pricing, the TOA proposed that customs’ values be based on real import data from the previous six months and reviewed every two years. This would introduce transparency into the valuation process. For the sake of openness and responsibility, customs must also record the steps used to arrive at a price.