In brief: telecoms regulation in Pakistan – Lexology

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Communications policy
Summarise the regulatory framework for the communications sector. Do any foreign ownership restrictions apply to communications services?
The Pakistan Telecommunication Authority (the PTA) established under the Pakistan Telecommunication (Re-organization) Act 1996 has the mandate to regulate the establishment, operation and maintenance of telecommunication systems and the provision of the telecommunication services in Pakistan, which are regulated in terms of the PTA Act and the rules, regulations and guidelines framed thereunder (the PTA Laws).
For the purposes of the foregoing:
The PTA is also responsible for dealing with applications relating to the use of radio-frequency spectrum through its Frequency Allocation Board (FAB), which has the exclusive authority to allocate and assign portions of the radio-frequency spectrum to:
The primary functions of the PTA include:
The relevant government ministry vis-à-vis telecommunications services is the Ministry of Information and Technology and Telecommunication (the MOITT).
The telecommunications sector in Pakistan does not have a minimum domestic legal presence requirement; however, the PTA prefers that a local entity (special purpose vehicle) be established that applied for a licence to provide telecommunications services. The special purpose vehicle or local entity can be completely foreign-owned or controlled.
Describe the authorisation or licensing regime.
In terms of the PTA Act, no person shall establish, maintain or operate any telecommunications system or provide any telecommunications service unless a licence for the same has been granted to it by the PTA. Additionally, no terminal equipment may be directly or indirectly connected to a public switch network, unless a type approval for such equipment has been granted by the PTA.
Licenses for core telecommunications services include:
The PTA Rules, provide that a licence granted under the PTA Act and the Pakistan Telecommunication Rules 2000 (the PTA 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 PTA. 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 the PTA Rule, be accompanied by the documents and details of information, along with fees in the amount prescribed in accordance with the conditions for each type of licence to be issued. An application may be withdrawn at any time before the grant of a licence.
The PTA may grant a licence to an individual, class of persons, company or corporation. Applications shall be considered on their individual merits and in determining whether or not to grant a licence the PTA shall take into account the following factors:
The PTA may, if it is satisfied that there are any factors in relation to that application that threaten or potentially threaten national security, reject an application. A licensee shall have the right to establish, maintain and operate a telecommunication system in the territory and for the period stipulated by the PTA in the licence, in accordance with the provisions of the Act and the PTA Rules.
Subject to the PTA Act and PTA Rules, a licence shall be granted for an initial term of not less than 25 years. 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. If the licence is not to be renewed, the PTA 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.
A licence granted in accordance with the provisions of the PTA Act and the PTA Rules shall be subject to the restrictions on the transfer of the licence and on change of ownership of the licensee and such further restrictions as are contained in the PTA Rules. If a substantial ownership interest in, or control of, a licensee is proposed to be changed, the licensee shall give the PTA notice of such fact in writing. That written notice shall include all relevant details of the proposed change. If the PTA is of the 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.
For the purpose of understanding, the terms ‘control’ and ‘substantial ownership interest’ used in the response to this shall bear the following meanings:
Additionally, telecom services cannot be resold without the prior written consent of the PTA. No distinction has been made vis-à-vis foreign or local companies in this regard.
FAB has exclusive authority to allocate and assign portions of the radio-frequency spectrum to the providers of telecommunication services and telecommunication systems, radio and television broadcasting operations, public and private wireless operators and others.
Every application for allocation and assignment of radio-frequency spectrum has to be made to the PTA. The PTA is required to refer the application to the FAB within 30 days from the receipt of such application.
On receipt of the application, the FAB classifies the telecommunication services and may allocate or assign the specific frequencies to the applicant. The FAB is required to notify the applicant of the status of the application within three months.
It may also be noted that the FAB auctions spectrum or frequency for use by mobile network operators.
The Pakistan Table of Frequency Allocations is the broadest technical document showing the allocation of bands to various types of services. The Pakistan Table of Frequency Allocations is drawn from, and kept current with, the International Telecommunication Union (ITU) Radio Regulations, which are revised every few years at the World Radio Communication Conferences.
The PTA has divided Pakistan into telecom regions. Applicants wishing to obtain an LL licence in more than one region are required to file a separate application for each region along with necessary documents.
The application fee for an LL licence is US$500 (or equivalent in Pakistani rupees), the licence fee is US$10,000 (or equivalent in Pakistani rupees) per telecom region, and the renewal fee is 0.5 per cent of annual gross revenue minus inter-operators’ payments.
Details relating to eligibility criteria, application package, information required to be provided by an applicant for an LL licence, grounds for disqualification, specific conditions and a licence template for an LL licence are available at the PTA website.
The application fee for an LDI licence is US$500 (or equivalent in Pakistani rupees), the licence fee is US$500,000 (or equivalent in Pakistani rupees), and the renewal fee is 0.5 per cent of annual gross revenue minus inter-operators’ payments. An LDI licence applicant is also required to provide a standby letter of credit of US$10 million (or equivalent in Pakistani rupees) in favour of the PTA as part of the application package.
The initial licence fee for a satellite landing station is 0.66 per cent of the annual gross revenue of the first year of operation after obtaining the licence.
The initial licence fee for a fibre optic submarine cable landing station is 5 million Pakistani rupees and the annual licence fee is 1.5 per cent of the annual gross revenue.
Details relating to eligibility criteria, application package, information required to be provided by an applicant for an LDI licence, and a licence template for an LDI licence are available at the PTA website.
Where the assignment of spectrum is linked to a set of licence conditions, the associated fees will consist of two parts. The spectrum price for national mobile cellular licenses will be determined through auction, which will also be used as a benchmark to determine the price per megahertz (MHz) per annum for the existing operators. The CMO licensees will pay the PTA, in addition to the spectrum administration fee and the spectrum price, an annual licence administration fee, to reasonably cover the cost of regulation.
The initial licence fee is to be determined in an auction through open bidding. The annual licence administration fee shall not exceed 0.5 per cent of last year’s gross revenue, minus inter-operator and related PTA or FAB mandated payments.
Administrative fees for the radio spectrum will be set to recover the cost of administration of that spectrum. The total income generated from administrative fees for the whole spectrum should recover the reasonable operational costs by the FAB incurred while managing, licensing and policing that spectrum. Spectrum price for line-of-site links will be limited to the annual licence administration fee.
However, we note from a decision of the PTA, dated 23 July 2019, that the PTA has decided, inter alia, that the fee for the renewal of a licence shall be US$39.5 million per MHz for a frequency spectrum of 900MHz and US$29.5 million per MHz for a frequency spectrum of 1800MHz. Licences that require renewal shall be done on a technology-neutral basis, subject to payment of a renewal fee to be calculated in accordance with a per MHz price as provided above. The terms and conditions relating to enhanced quality of service and coverage of the network shall be finalised in line with applicable regulatory practice and the Telecom Policy 2015.
Only licensees of the PTA holding a valid licence from the PTA, enabling them to provide connectivity to the internet may provide internet connectivity to the internet through public Wi-Fi hotspots. The owner of a public Wi-Fi hotspot entity shall be required, pursuant to the Data Retention of Internet extended to Public WIFI-Hotspots Regulations 2018 to:
Do spectrum licences generally specify the permitted use or is permitted use (fully or partly) unrestricted? Is licensed spectrum tradable or assignable?
FAB, as part of the licence granted to a licensee of the PTA, assigns radio frequencies with associated technical parameters for all wireless networks after technical evaluation of spectrum management tools, formulation or review of the National Frequency Spectrum Plan and suggests means for optimised spectrum utilisation, international coordination and agreements with other administrations in relation to various satellite and terrestrial-based communication networks, fulfilling national obligations as contained in international treaties of the ITU, etc, monitoring of spectrum for the detection of unauthorised wireless stations, site clearance of all wireless installations in the country.
To obtain type approval for radio or satellite-based telecom terminal equipment, a frequency clearance for the respective equipment will be required from the FAB, unless the same is being imported by a person duly licensed to operate using such radio frequency.
The band plans are formulated based on ITU Radio Regulations and best international practices thereby allocating potions of radio-frequency spectrum to different services. Spectrum licenses specify the permitted use thereunder. Spectrum is granted as part of a licence issued by the PTA, and 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 PTA.
Which communications markets and segments are subject to ex-ante regulation? What remedies may be imposed?
Licensees of the PTA having a share of more than 25 per cent of a particular telecommunication market are presumed to have a significant market power (SMP) status. The PTA has the authority to extend the SMP status to operators with less than 25 per cent market share or to relieve those with more than 25 per cent of the status after a comprehensive analysis of the market. PTA monitors SMP status licensees, such that they do not abuse their dominant positions through anticompetitive practices, and fair competition is promoted in the sector.
The Fixed Line Tariff Regulations 2004 provide, inter alia, that non-SMP operators are free to set and revise their tariffs at any time and in any manner they like, provided that they inform the PTA about their proposed tariffs thirty days before the applicability of new tariffs. The PTA may make amendments to the tariffs of non-SMP operators where the tariffs are considered anticompetitive.
Pursuant to the Interconnection Guidelines 2004 all operators are obliged to provide interconnection to other operators desiring to interconnect. The operator with SMP is obliged to prepare and submit its reference interconnect offer (ROI) to the PTA within one month of its determination as an SMP operator by the PTA. The SMP operator shall make the ROI publicly available within seven days after approval by the PTA.
Is there a legal basis for requiring structural or functional separation between an operator’s network and service activities? Has structural or functional separation been introduced or is it being contemplated?
There are no requirements for a structural separation between the network and service activities of an operator.
Outline any universal service obligations. How is provision of these services financed?
Every licence granted under the PTA Act read with the PTA Rules contains conditions requiring the licensee to contribute to the Research and Development Fund (R&D Fund) and the Universal Service Fund (USF).
A person who has been issued a licence to provide telecommunication services has to contribute 0.5 per cent of gross revenue, minus inter-operator and related PTA or FAB mandated payments, to the R&D Fund.
A person who has been issued a licence to provide telecommunication services is required to pay a USF charge of 1.5 per cent of gross revenue, minus inter-operator and related PTA or FAB mandated payments as determined by the government.
Describe the number allocation scheme and number portability regime in your jurisdiction.
Licenses of the PTA are eligible to apply for allocation of number capacity, as per the Number Allocation and Administration Regulations 2005. The PTA has been mandated to develop and manage a national numbering plan for the provision of a wide range of efficient telecommunication services in Pakistan. Under the plan, the leading digit defines the service or network for the use of a particular numbering range. The structure of the national numbering plan complies, as far as possible, with ITU-T Recommendations E.164.
Numbers that can be ported include, without exception, all numbers for which a written agreement exists between a subscriber and an operator. All subsequent portability shall be handled in the same manner as the first time. The current operator shall become the donor operator and the new operator becomes the recipient operator. If a subscriber wants to return to any previous operator, the order shall be handled like a standard porting request. There shall be no difference even if the recipient operator was the original number range holder. If for any reason, a subscriber wants to end his or her relationship with his or her current operator, the current operator shall handle this as a termination in its telecommunication system and shall reset the status of the number as a quarantine period, at the end of which period the number shall revert to the original range holder for recycling purpose.
The licensee can allocate individual numbers to customers from the blocks allocated to it by the PTA, and shall maintain suitable records of its utilisation of numbering capacity, subject to the following conditions:
However, an allocation conveys an ongoing right of use and an expectation of at least a three-month notice period, should it be necessary to withdraw or change allocated numbers.
All operators are required to make mobile number portability available to their subscribers, however, LL licensees are not required to make available number portability to their customers or other operators unless the PTA so requires.
Every recipient operator is required to keep and maintain records of the application forms of those subscribers who have requested porting for at least six months, for inquiry by concerned donor operators or examination by the PTA. The operators are required to maintain usage records, including, where available, called and calling numbers date, duration, time and the called number cell with regards to usage made on its central databases for a rolling 12 months, for security by, or as directed by, the PTA or as required by any law enforcement or intelligence agency.
Are customer terms and conditions in the communications sector subject to specific rules?
All licensees are required to make available to their customers a set of standard terms and conditions that will act as a contractual relationship with their customers when providing such customers with line rental, terminal equipment and any form of telecommunication services. A licensee shall also file a copy of all such standard terms with the PTA prior to entering into such an agreement with its customers.
The above condition shall not, however, prevent the licensee from negotiating and entering into an agreement with any customer for the provision of any licensed service on terms that are not the standard terms and conditions or that have not been filed with the PTA.
Are there limits on an internet service provider’s freedom to control or prioritise the type or source of data that it delivers? Are there any other specific regulations or guidelines on net neutrality?
Currently, there are no specific laws relating to ‘net neutrality’ in Pakistan. While the Broadband Quality of Service Regulations 2014 allow the PTA to keep checks on internet service providers (ISPs) to maintain network availability and link speed, these indicators are not grounded in net neutrality. So while ISPs have to maintain certain speeds, there is no requirement for internet speech to be uniform and non-discriminatory for all content.
Is there specific legislation or regulation in place, and have there been any enforcement initiatives relating to digital platforms?
The PTA, being the telecom regulator in Pakistan, will implement policies to block websites with blasphemous, un-Islamic, offensive, objectionable, unethical and immoral material. In this regard, the PTA, as and when directed by the federal government, can direct or require its licensees to implement internet protocol or uniform resource locator-blocking or filtering protocols.
The Removal and Blocking of Unlawful Online Content (Procedure, Oversight and Safeguards) Rules 2021 provide that a service provider and the social media company shall deploy mechanisms to ensure immediate blocking of live streaming or online content through online information systems in Pakistan if such content relates to terrorism, hate speech, pornography, incitement to violence, and is detrimental to national security on receiving intimation from the PTA. The removal or blocking of access to online content would be considered necessary in the interest of:
Where the service provider, social media company or significant social media company fails to respond to the notice or satisfy the PTA in respect of the alleged contravention, the PTA may, after affording an opportunity of a hearing and by an order in writing, take any of the following actions:
Additionally, a significant social media company (a social media company having more than half-a-million users in Pakistan), shall be required to:
The significant social media company shall publish on its online information systems the contact details as well as the mechanism by which user or any complainant who suffers as a result of access or usage of online information system can notify their complaints and must:
The service provider, social media company and significant social media company shall not knowingly host, display, upload, publish, transmit, update or share any online content in violation of local laws.
Pursuant to PECA, whoever, with dishonest intent, undertakes the following shall be punishable with imprisonment:
It is pertinent to note that the provisions of PECA are not only specific to the licensees of PTA but the scope of PECA extends to every citizen of Pakistan, wherever he or she may be, and also to every other person for the time being in Pakistan. The same also applies to any act committed outside Pakistan by any person; whereby the act constitutes an offence under PECA and affects any person, property, information system or data, in Pakistan.
For the purposes of the above:
Further, PECA provides that a service provider shall, within its existing or required technical capability, retain its specified traffic data (data relating to a communication indicating its origin, destination, route, time, size, duration or type of service) for a minimum period of one year or such period as PTA may notify from time to time and, subject to the production of a warrant issued by the court, provide that data to the investigation agency or the authorised officer whenever so required.
For the purpose hereof, a ‘service provider’ means to include a person who:
Service providers are required to retain traffic data by fulfilling all requirements of data retention and its originality, as per the provisions of PECA.
In 2010, access to Wikipedia, YouTube, Flickr and Facebook was banned in response to a contest to draw images of the Prophet Mohammad. In 2012, access to YouTube was banned from hosting anti-Islamic content. The ban was removed in 2016. In 2020, TikTok was banned by the PTA for ‘immoral content’, which ban was removed after the particular content was removed.
Are there specific regulatory obligations applicable to NGA networks? Is there a government financial scheme to promote basic broadband or NGA broadband penetration?
There are no specific regulations targeted at NGA in Pakistan, however, the PTA’s strategies are evolving to address the newly emerging digital priorities of Pakistan. With 5G on the global horizon, the government issued a policy directive for the introduction and trials of 5G wireless networks in Pakistan. On the advice of the federal government, the PTA has prepared the Framework for Test and Development of Future Technologies (Particularly Fifth Generation (5G) Wireless Networks) In Pakistan.
Also, as part of the report commissioned by the World Bank, the MOITT has published on its website a draft of the 5G Readiness Plan for Pakistan. In connection with the feedback received on the 5G Readiness Plan, the MOITT has also published on its website, 5G Strategic Plan & Policy Guidelines.
Is there a specific data protection regime applicable to the communications sector?
While there is no general data protection regime in Pakistan, the MOITT has uploaded on its website, a consultation draft of the personal data protection bill for stakeholder comments before it is tabled before the Parliament. The definition of the term ‘personal data’ therein has been widened to include, inter alia, any information that is related directly or indirectly to a data subject whereby, a data controller shall (when once the law is promulgated) be required to provide to the data subject in a written notice, the legal basis for the processing of personal data and time duration for which the data is likely to be processed and retained thereafter. However, since the law has not yet been promulgated, the requirements thereunder are not yet applicable.
All licensees of the PTA are required to take all reasonable steps to ensure that those of its employees who obtain, in the course of their employment, information about customers of the licensee or the customer’s business (customer information), observe the provisions of a code of practice on the confidentiality of customer information (the Confidentiality Code). Such Confidentiality Code is required to be prepared by the licensee in consultation with the PTA and is required to specify the persons to whom customer information may not be disclosed without the prior consent of that customer and regulate the customer information that may be disclosed without the prior consent of that customer.
The PTA, in the exercise of its powers under the PTA Act, has framed the Telecommunication Consumer Protection Regulations 2009, which is the principal consumer protection legislation that applies specifically to telecom service providers.
The highlights of the same are as follows:
Is there specific legislation or regulation in place concerning cybersecurity or network security in your jurisdiction?
The MOITT on its website has published the National Cyber Security Policy 2021, which inter alia provides a review of Pakistan’s cybersecurity landscape, along with a vision, scope and objectives.
The current legal framework for cybersecurity is governed by PECA. The purpose of PECA is to, inter alia, control the increasing number of cybercrimes in Pakistan, and to control the offences related to information systems. It provides mechanisms for the investigation, prosecution and trial of electronic crimes.
PECA provides that the unauthorised access or the unauthorised copying or transmission of data or an information system with the intent of injury, wrongful gain or wrongful loss or harm to any person shall be treated as a punishable offence. Further, PECA provides that a service provider shall, within its existing or required technical capability, retain its specified traffic data (data relating to a communication indicating its origin, destination, route, time, size, duration or type of service) for a minimum period of one year or such period as the PTA may notify from time to time and, subject to the production of a warrant issued by the court, provide that data to the investigation agency or the authorised officer whenever so required.
PECA provides for the constitution of a computer emergency response team (CERT), to respond to any threat against or attack on any critical infrastructure information systems or critical infrastructure data, or widespread attack on information systems in Pakistan. To achieve this, the PTA has prepared an implementation framework titled CERT (Computer Emergency Response Team) – Pakistan Telecom Sector Implementation Plan. The framework is pertinent to the country’s telecom sector and recommends steps to be taken by the PTA to establish such teams. The framework delineates upon functions and roles of CERT.
For the purposes of PECA, the term ‘service provider’ includes a person who:
Is there specific legislation or regulation in place, and have there been any enforcement initiatives in your jurisdiction, addressing the legal challenges raised by big data?
Are there any laws or regulations that require data to be stored locally in the jurisdiction?
There are no specific laws that regulate data protection in Pakistan, and while PECA criminalises unlawful or unauthorised access to information or data, or copying or transmission of critical infrastructure data, it too does not regulate data protection in Pakistan. However, a personal data protection bill has been uploaded by the MOITT on its website for stakeholder comments before it is tabled before Parliament. The same provides that personal data shall not be transferred to any unauthorised person or system. If personal data is required to be transferred to any system located beyond the territories of Pakistan or a system that is not under the direct control of any of the governments in Pakistan, it shall be ensured that the country where the data is being transferred offers personal data protection equivalent to the protections provided under the regime provided thereunder, and the data so transferred shall be processed in accordance with the regime provided thereunder and, where applicable, the consent given by the data subject.
Further, all licences granted by the PTA generally, inter alia, contain provisions to the effect that the licensee shall keep confidentiality of the message transmitted over the licensee’s system and shall not divulge the contents of any message or part thereof to any person not entitled to become acquainted with the system and shall conform to the rules and regulation. Licensees are required to take all reasonable measures to prevent information about their subscribers, including information about their business, other than directory information, from being disclosed to third parties, including the licensee’s own subsidiaries, affiliates and associated companies. A licensee shall be permitted to disclose information about a subscriber where the licensee has clearly explained to the subscriber the nature of the information to be disclosed; the recipients of the information to be disclosed; and the purpose for the disclosure, and the subscriber has provided licensee with consent to such disclosure
Summarise the key emerging trends and hot topics in communications regulation in your jurisdiction.
The rapid growth in mobile data traffic and consumer demand for enhanced mobile broadband has led to an increasing emphasis on the upcoming 5G mobile technology. Seen as a comprehensive wireless-access solution with the capacity to address the demands and requirements of mobile communication, it is projected that this technology will operate in a highly heterogeneous environment and provide ubiquitous connectivity for a wide range of devices, new applications and use cases.
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