ISLAMABAD, Jan 28: Pakistan granted specialized industry status on Wednesday to cellular telephony to compete in the world market with international standards.

At the same time it has been made mandatory on mobile companies to remain within a capped retail tariff regime and contribute a portion of their revenue for universal service provision.

Projecting an investment of $1.5 billion in the next five years with the addition of two new operators, the policy also makes the mobile operators eligible for LDI (long distance international) and LL (local loop) connections besides binding them to introduce latest technologies like 3G and 2100-MHZ spectrum.

"This progressive policy is designed to give a boost to the sector while keeping in mind the future technological developments in the field of mobile cellular communications," announced Minister for Information Technology and Telecommunication Awais Ahmed Khan Leghari here at a news briefing.

The policy provides new service features like national roaming, number portability within two years, infrastructure sharing, service quality standards and targets, extended rural coverage obligation, customer charter, standard services contract in addition to international roaming and interconnection obligations.

"These new features would add to the customers convenience and satisfaction," the minister said. Under the new policy, cellular licensees would also be required to contribute towards research and development fund 0.5 per cent of their gross revenue and 1.5 per cent to universal service fund (USF). However, the mobile operators will be eligible to apply for money from the USF to recover investment for rolling out in rural and under-served areas.

The PTA has also reduced its regulatory fee from 1.5 per cent to 0.5 per cent of last year's gross revenue of the operator while the frequency usage charge would be determined later.

The mobile licensees will have the right to establish their own infrastructure within a PTCL region and to provide their own interconnection circuits to other operators.

"We are hopeful that with the new mobile licensing, additional competition in the sector will drive the prices down and the people of Pakistan will avail better quality of service, increased coverage and service at affordable and competitive prices," Mr Leghari said. The policy, which is not subject to review before five years, will soon be presented in parliament in the shape of a bill.

The minister was confident that competition in the new environment would help in creating additional jobs numbering 12,000 to 15,000 in the country during the next four to five years. Besides, the coverage would be extended to 300 cities and towns, including over 70 per cent tehsil headquarters and expand coverage to over 50 per cent of the population from the present 30 per cent by increasing the customer base to about 15 million from the existing three million.

The tax revenues have been projected to increase from Rs3.4 billion to Rs16.9 billion (including general sales tax, import duties and corporate tax but excluding activation charges of Rs2,000). The mobile teledensity is also expected to increase from 2 per cent to about 10 per cent.

Two more mobile cellular licenses would be issued by the Pakistan Telecommunication Authority (PTA) for 15 years through open bidding for neutral technology like GSM and CDMA.

The minister said the existing mobile service licence would be renewed as per provision of the new policy after the expiry of their existing licences. But they have been given option to adopt to the new policy regime even for the remaining term of their existing licences so that all mobile licences operate under the same policy.