New IHC Verdict Troubles Zong With Good News for Public

The Islamabad High Court (IHC) has upheld the Pakistan Telecommunication Authority’s (PTA) directive, ordering Zong to refund around Rs 2 billion to its customers. IHC Justice Miangul Hassan Aurangzeb dismissed Zong’s appeal against the PTA’s decision, which mandated the reimbursement of Rs 2,028,038,584 collected in the name of service, maintenance, and operational fees between April 26, 2019, and July 12, 2019.

The court noted that Zong had been charging Rs10 as service or maintenance fees on every Rs100 prepaid card purchase. This practice was previously addressed by the Supreme Court back in 2018 which deemed such charges invalid and unlawful. Despite this, Zong reportedly resumed these deductions after the Supreme Court’s interim relief period ended in April 2019.

Following the Supreme Court’s directives, the PTA issued letters requesting telecom operators to disclose details of service charges collected after April 24, 2019. In response, Zong failed to provide the required information after which the court directed PTA to order a refund of the collected amount in the form of balance credits without validity restrictions. Instead of complying, Zong filed an appeal with the IHC in September 2019, which has now been dismissed as not maintainable.

The telecom industry in Pakistan has been under scrutiny for imposing various charges on consumers. This ruling reinforces the need for operators to maintain fair billing practices and comply with regulatory guidelines to foster trust and integrity in the sector. As a result of the IHC’s decision, Zong is now obligated to refund the specified amount to its affected subscribers promptly.

Our Take

This judgment is seen as an effective move towards ensuring transparency and consumer rights within Pakistan’s telecom sector. It also highlights the judiciary’s commitment to upholding regulatory decisions aimed at protecting consumers from unjust charges. However, this case also underscores a concerning trend of non-compliance among telecom operators. Despite clear directives from the Supreme Court and the PTA, Zong continued to impose service charges deemed illegal, reflecting a disregard for regulatory authority and consumer welfare.

However, on the other hand, the telecom industry has expressed concerns over heavy taxation and regulatory challenges. The Telecom Operators Association recently highlighted that unresolved tax issues and new taxes introduced in the 2024 federal budget could deter foreign investment and impact Pakistan’s digital infrastructure and economic growth.