The situation hampers the Company's ability to fund its capital expenditure program for network expansion. This can put the existing operator to a position of undue disadvantage. Due to relatively higher prices of NWD and ISD, PTCL has been experiencing illegal by-pass by other operators. PTA has received complaints in this respect and PTCL has suffered reduction in traffic on many important international and domestic routes. It is technically not possible to completely control this.
Some economic solution has to be worked out.
Generally these measures created a positive impact on PTCL's financial viability. In 1997, PTCL and GOP realized that its international business couldn't subsidize its domestic business forever as the downturn in international accounting rates became quite visible. PTCL's ability to compete after December 2000 on NWD has increased due to rationalization of this component. Its dependence on Total Accounting Rate for settlement of international tariff has decreased. All tariff reforms initiated so for have focussed on re-balancing domestic tariffs by lowering NWD charges, increasing local call, and line rent rate.