How USF Awards Telecom Projects – Ensuring Transparency or Encouraging Favoritism?

The Universal Service Fund (USF) plays a key role in expanding telecom services in underserved areas across Pakistan. The fund awards contracts to telecom operators through a competitive bidding process. However, concerns remain about whether the process is truly transparent and fair. Some experts argue that certain operators benefit repeatedly, raising questions about favoritism in awarding contracts.

The Bidding Process

USF follows the Single Stage Two Envelope System for awarding projects. This method ensures that only licensed telecom operators complying with USF contributions can participate.

• Bidding Stages

• Who Gets the Contracts?

USF has awarded contracts to both mobile and fixed-line operators over the years. The same major players often secure projects.

While these companies have the capacity to handle large-scale projects, some industry experts question whether smaller players get a fair chance to compete.

Who Controls Project Execution?

Once a contract is awarded, USF does not directly interfere in project execution. The winning operator is responsible for:

• Network design and planning
• Site selection and acquisition
• Installation of telecom infrastructure
• Securing necessary government approvals
• Providing telecom services in target areas

This means that telecom operators have full control over project timelines, deployment strategies, and execution. While this ensures faster implementation, it also raises concerns about quality control and accountability.

Is the System Truly Fair?

USF states that all contracts are awarded in compliance with Public Procurement Regulatory Authority (PPRA) rules, but concerns remain over fairness and transparency. The repeated selection of the same telecom operators raises questions about whether the bidding process favors larger companies with established infrastructure and financial strength. Some experts argue that the lack of independent audits makes it difficult to evaluate the true impact and cost efficiency of these projects. Additionally, smaller operators struggle to compete, as the process appears to limit their participation, potentially reducing competition and innovation in the sector. Another major concern is the lack of public disclosure regarding bid evaluation details, making it harder to assess whether the process is genuinely competitive and merit-based.

To address these concerns, experts suggest implementing stronger independent oversight of the bidding process and making evaluation reports publicly accessible to ensure transparency. Encouraging competition by allowing smaller operators to enter the market—possibly through strategic partnerships—could lead to more diverse participation. Regular third-party audits are also recommended to assess whether these projects deliver value for money and effectively improve telecom services in underserved areas. Without these measures, concerns over favoritism and limited competition are likely to persist.

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