Sheryaar Sethar Article English

Sheryaar Sethar

M.A (Prev)

Roll # 11

(Article)

Topic: - Sim companies and their functioning.

Gsm sim shave been in business in Pakistan since 2004 when the first ever sim company paktel switched from AMPS to GSM. Paktel Company was later named Zong and it is still one of the biggest gsm Sim Company in Pakistan.

 But the biggest gsm sim company in Pakistan now is Mobilink jazz, especially after the merger of jazz with warditel now the company serves a total of 59 million subscribers and has a market share of 36 percent. While its competitors Telenor generated revenue of 280 billion rupees, zong generated 166 billion rupees and ufone made 151 billion rupees. 

These mobile companies have been earning a whole load of money since the last 15 years in Pakistan but their hunger for more never ends. The mobile sim companies earned a staggering 362 million rupees in 2017, and 320 million in 2016, excluding the governmental taxes.

But the services have not improved over the last 10 years. Yes there were some improvements made but they are not enough considering the needs of the common people and the rising demand of Sims around the country. 

The telecom companies and the govt in alliance made a hug e amount of money under the banner of withholding taxes, GST and service charges.

Mobile customers used to pay 25% of their amount in tax, at the time of card load. Then there was another 18.5% general sales tax on each call taking the total deductions to around Rs. 40 on a Rs. 100 card.

Supreme Court, in a Suo Moto case, decided to suspend all taxes and service charges starting from June 13th, 2018. The premier court said that withholding tax shouldn’t be applied on everyone as not every mobile phone user comes under tax net and hence it can’t be applied on every subscriber.

[The Supreme Court then ordered the FBR to lay down such a policy that the individuals that do not come under the tax net should not be charged for it. But the companies lost a huge amount of money in this suspension of taxes. The sim companies lost a staggering amount of 2 billion rupees in just the twenty days of service charge suspension and the federal govt lost 2.8 billion worth of withholding tax in these twenty days. 

Copy paste (https://propakistani.pk/2018/06/28/taxes-on-mobile-card-cards-are-not-coming-back-for-now/) 

But the ban did not last for long the taxes came back and now it was a double blow for the customers not only the taxes came back but the mobile companies had already increased their packages prices in order to cope with the loss they were making in result of the tax suspension. So now the 12.5 percent withholding was back and the packages are much expensive then they were before.

During the last 3 years social media and specially whatsapp has delivered a severe blow to these companies. With whatsapp providing the option to audio or video call anyone and with no charges the companies were destined to suffer. The use of Sims to call or chat reduced and the companies were forced to make some improvements in order to stay in business. So the rates of the packages were a little lowered and the services improved a little. 

The free missed call was a result of that competition. The Sims now provides zero balance calls, free mbs to their user in order to compete with the giants like facebook messenger and whatsapp. 

But the services are very low in quality, especially customer complains about the automatic subscriptions to some packages that they don’t know they are subscribed to but they are charged on every load.

The sim companies need to take a second look at their policies and services in order to maintain their ground in the business. Otherwise their position and share in the market could be in danger.