AGP Objections on Policy Matters Risk Telecom Industry Development

Audit Reports by AGP with objections on Policy matters lack understanding and has at times put the otherwise Telecom Industry development at risk. Meanwhile, the Auditor General of Pakistan (AGP) reveals that unauthorized usage of a frequency block by CM Pak caused $9.83 million per year (Rs 1,572.80 million) loss to Public Exchequer.

The Audit report on the account of telecommunication sector audit year 2019-20 observed that M/s CM Pak (Zong) was assigned temporary additional assignment of 2 x 5 MHz (11950-1955 / 2140- 2145 MHz) for a period of two years as per FAB 42nd Board meeting held in February 2016.

AGP Objections on Policy Matters Risk Telecom Industry Development

The additional assignment expired in February 2018 but M/s CM Pak (Zong) has kept on utilizing the F7 block. The subject block had a minimum value of $147.5 million for 15 years license (Per year US$ 9.83 million). FAB did not take appropriate action which resulted in unabated use of temporary assignment causing loss to national exchequer. The report also observed unauthorized change of technology by WLL operator in 3.5 GHZ. It was observed from monitoring reports that some WLL operators had changed their technology from WiMAX to LTE and LTE-Advanced without approval of the FAB. The FAB management did not take appropriate regulatory action against these operations except for simply forwarding the cases to PTA. It is also important to note that as per policy the WLL Spectrum is for limited mobility only and technology upgradation is a different aspect which is allowed under the policy. Audit Reports by AGP with objections on Policy matters lack understanding and has at times put the otherwise Telecom Industry development at risk.    

The AGP report observed utilization of spectrum without renewal of license by SCO. It was observed that a license was issued to SCO on 16th May 2003 with the expiry date of 15th May 2018. The Ministry of Kashmir Affairs & GB forwarded a summary to the Prime Minister of Pakistan for grant of permission to SCO to continue cellular communications in AJ&K and GB beyond 15th May 2018. PTA granted permission for the next six months with the direction to fulfil obligations which were prerequisite for renewal of the license. However, the contents of the summary and grounds of renewal of license were not made available to audit. The extension period was expired on 15th November 2018 but as per record the license was not renewed so far but the spectrum was being continuously used by SCO