They said although the government has withdrawn four per cent development surcharge, it had increased duties on PSTN to 15 percent from 5 percent, a move that would lead the sector to ruination.

At a press conference at the National Press Club in Dhaka yesterday, President of the Bangladesh Telecom Operators Association (BTOA) ATM Hayatuzzaman said as per the new budget proposal, the duty on PSTN equipment will be raised to 37 percent this time with inclusion of value added tax (VAT) and others.

The BTOA leader resented the withdrawal of all sorts of industrial benefits from the sector.

He said the government decision would threaten the sector that had created 3,000 direct and 70,000 indirect job opportunities.

Such a detrimental measure came at a time when the PSTN operators were putting their efforts to expand the users' base to one crore in next few years from the existing three lakh, he pointed out.

A total of Tk 1,500 crore has so far been invested in PSTN infrastructure development and another Tk 1,000 crore worth equipment are awaiting release from customs soon, the press meet was told.

"If government implements the proposed import duty structure on PSTN, we have to pay an additional Tk 370 crore for releasing those equipment costing the infrastructure development," Hayatuzzaman, also chairman of the Dhaka Telephone, said.

Khabiruzzaman, chief executive officer of GEP Telecom Ltd, said expenditure for providing every PSTN customer connection is three times higher than that of a cellular connection. But the government increased import duty both for a PSTN and cell phone set to Tk 500.

This duty was Tk 200 before announcement of the budget for the 2007-08 fiscal.

The PSTN service sector is yet to be flourished in the country and the profit from PSTN is very marginal as this fixed phone call charge is very minimal comparing to that of mobile phone.

That is why the government should not impose tax on PSTN equipments, the BTOA leaders said, urging the government to immediately reduce the duty.