Telenor Pakistan’s CEO Lars Christian Luel doesn’t seem to be happy with the increase in the tax burden and strict regulations imposed by the Government of Pakistan.
Talking to a select number of journalists in Islamabad last week Mr. Christian Luel expressed his concerns about the high prices of 3G license. He said that if viable business terms are not put in place on the auction of 3G then Telenor will not invest in it. Telecom companies are not money making machines so the new Government will have to come forward with right policies to attract foreign investment.
He told that currently there was the Federal Excise Duty (FED) being charged at the rate of 19.5 percent and withholding tax at the rate of 15 percent. The interconnect charges are not deducted from the customers – it’s the levy that the company pays from the already fixed call price. he explained that the ability to spend by customers has reached its limit. We don’t see an investment that big when so much is taken in taxes. The value of 3G license is decreasing with increasing taxes and regulations.
The CEO said that Telenor will consider bidding for 3G after doing its homework. He cited the example of India where company pulled out before bidding as initial price was set so high. He added that he was very clear in meetings with both top IT and Finance Ministry officials that the new government would have to show some progress either to take away some new regulatory requirements or tax it in a way to show that it was willing to support the industry.
Showing his level of anger, Mr. Christian Luel said that “Pakistan is probably the only country in the world that has more Klashnikovs than SIM cards. It is easier to buy Klashnikovs here than SIM cards”. It shows that how misinformed the CEO of one of the top telecom companies of Pakistan is. May be he should start selling Kalashnikovs then if he thinks its easier than buying a SIM?
