PTA Hits Zong with $11.77 Million Late Fee Demand Over License Renewal Delay
The Pakistan Telecommunication Authority (PTA) has issued a strong enforcement order against China Mobile Pakistan (CMPak), the operator of Zong 4G, directing the company to pay a Late Payment Additional Fee (LPAF) amounting to $11.77 million. The order follows years of legal battles, delayed payments, and courtroom proceedings over the renewal of Zong’s mobile license. The fee has been imposed due to a delay in the renewal of the company’s 2G mobile license originally granted to Paktel and later acquired by CMPak.
Background
Zong’s license, first issued in 1990 and renewed in 2004 for 15 years, was due for another renewal on October 23, 2019. The federal government had earlier issued a policy directive on May 9, 2019, outlining the license renewal terms, including a hefty renewal fee of $477.2 million.
Disagreeing with the policy and the amount, CMPak filed a writ petition (W.P. No. 3626/2019) in the Islamabad High Court. The court, in its interim order dated October 28, 2019, directed Zong to deposit 50% of the license renewal fee by November 25, 2019. Following the court’s order, Zong paid two instalments of PKR 18.69 billion and PKR 18.46 billion on November 22 and 28, 2019, respectively.
PTA, however, maintained that the original payment deadline of October 23, 2019, remained binding. On this basis, the Authority issued a demand note on December 24, 2019, followed by a reminder on January 23, 2020, seeking the late fee of $11.77 million. A Show Cause Notice (SCN) was then issued to Zong on March 11, 2020.
Legal Battle and Court Proceedings
Zong challenged the SCN through an appeal under Section 7 of the Pakistan Telecommunication (Reorganization) Act, 1996. However, the PTA dismissed the appeal on July 20, 2020, stating that the notice could not be considered an adverse order requiring a separate appeal.
Subsequently, Zong took the matter to the Islamabad High Court again through FAO No. 77/2020. The court, while hearing another related appeal (FAO 76/2020) concerning spectrum usage, decided both together and asked PTA to proceed strictly in accordance with the law after providing Zong a fair hearing.
Despite multiple petitions, including W.P. No. 3458/2020 and FAO No. 133/2020, the Islamabad High Court, in a consolidated judgment dated August 21, 2024, dismissed all of Zong’s challenges. The company then moved the Supreme Court of Pakistan, which on September 25, 2024, issued a status quo order and encouraged both parties to reach an amicable settlement.
Following this, Zong signed the renewed license on October 4, 2024, with the effective date backdated to October 23, 2019. The PTA emphasized that this signing did not alter the original terms, including the payment deadlines.
PTA’s Final Verdict
A final hearing was held on January 22, 2025, attended by Zong’s legal representatives. They reiterated that the fee was paid under court directions and that the extension granted by the court nullified any claim of delay. However, PTA rejected this interpretation, clarifying that the court orders allowed payment to proceed during litigation but did not legally extend the original deadline.
The Authority concluded that no official extension of the payment deadline had ever been granted. The signed license retained the original effective date and payment terms, confirming that CMPak remained bound to the initial schedule.
Accordingly, in its order dated May 12, 2025, PTA directed CMPak to pay $11,770,933 as a late payment additional fee (LPAF). The amount must be paid in US dollars or equivalent Pakistani rupees at the NBP TT selling rate within seven days of receiving the order.
The PTA warned that failure to comply will result in legal action under the applicable laws.
