Saturday, November 03, 2001

PTCL Goofups!



When it comes to Backbone Internet connectivity, commercial ISPs in Pakistan currently have three options to choose from - i) International Private Leased Circuit, ii) Premium Internet Bandwidth from PIE (PTCL) and iii) Shared Internet Bandwidth from PTCL. All these options are circuits that land somewhere within the premise of PTCL. To make use of any of these circuits, they must be extended to the premises of the customers (the ISPs). This 'extension', is acheived through yet another PTCL-provided service called 'Digital Cross Connect' circuit (or DXX in short). The total charges hence incurred by the ISP under the head of Internet Backbone is the sum of the Internet Port Charges (any one of the three option mentioned above) plus appropriate DXX circuit charges. The DXX charges are based on circuit capacity.

In April 2000, Ministry of Science & Technology announced that to facilitate the ISP industry and Internet growth in Pakistan, they are flattening the charges of DXX circuits larger than 192 kbps (for Internet Service Providers) at Pak Rs 55,000 per month irrespective of the size of the circuit. As per common sense, this facility should have been applicable to all the above mentioned three Internet connectivity options. However, as it turns out now, the facility was only applicable to IPLC and PIB circuits customers and not to Shared Internet Bandwidth customers.

As Shared Internet Bandwidth is the most cost-effective solutions for ISPs, a large number of service providers are hooked up to it. PTCL's accounts officials have been erroneously applying this consessional policy to Shared Bandwidth customers in southern region (Karachi etc.) for the past 18 months. The erroneous consession, in most of the cases, has piled up to millions of rupees. ISPs in the north region (Lahore, Islamabad etc) have been paying heavy amount under the head of DXX circuit for their respective 'Shared Bandwidth' circuits during all this time. As the discrepancy got uncovered, a crisis has now emerged. If PTCL sticks to its claim and tries to recover millions of rupees from the ISPs in the southern region, that is going to create severe cash flow problems for the ISPs for no wrong of their own. Stiff resistance is expected from the affected ISPs in this case. If PTCL forego its claim, the ISPs in the north will, very justly, claim back the heavy amount they have been paying to PTCL for the DXX circuits to which PTCL will not easily agree. Consensus is appearing in the industry that PTCL should be asked that Shared Bandwidth circuits should be treated the same way IPLCs and PIB circuits are treated and the Rs 55,000 flat rate policy should be applied on them as well. ISPs in the north will push their case and try to get the paid amounts adjusted in future payments to PTCL.

PTCL Tariffs can be found here.