Universal Service Fund’s Rs. 9.5 Billion Investment in KPK – Where Did It Go?
Over the past 3.5 years, the Universal Service Fund (USF) has allocated Rs. 9.5 billion to enhance telecom connectivity in Khyber Pakhtunkhwa (KPK). The initiative aimed to improve digital access in underserved areas through the expansion of 2G, 3G, and 4G services, fiber optic deployment, and better connectivity along key road networks. These projects were designed to bridge the digital divide, particularly in rural and remote regions where private telecom operators had little incentive to invest on their own.
Breakdown of USF Investments
A substantial portion of the investment went into expanding mobile network services across 1,600 mauzas and 17.43 kilometers of roads, with leading telecom operators such as Jazz, Ufone, and Telenor executing these projects. Additionally, Rs. 2 billion was allocated to fiber optic deployment, extending high-speed connectivity to 1,159 kilometers of fiber across various tehsil headquarters (THQs) and union councils (UCs). To support tourism, connectivity was enhanced in key destinations such as Swat, Chitral, and Buner, ensuring that visitors and local businesses could benefit from improved mobile network access.
| Project Category | Key Areas Covered | Operators Involved | Funds Disbursed (Rs.) |
|---|---|---|---|
| 2G/3G/4G Expansion | 1,600 mauzas & 17.43 km roads | Jazz, Ufone, Telenor | 7.5 billion |
| Fiber Optic Deployment | 1,159 km fiber, 67 THQs/UCs | PTCL, Dancom, Nayatel | 2 billion |
| Tourist Connectivity | Swat, Chitral, Buner | Jazz, Telenor | 1.9 billion |
Major Projects and Operators
Several major projects were implemented under this initiative, covering various districts of KPK. Telenor was responsible for the Chitral and Kohistan projects, receiving Rs. 1.09 billion and Rs. 725 million, respectively, to provide connectivity to hundreds of mauzas. Ufone handled projects in Khyber and Mohmand, while Jazz secured contracts for areas such as Bannu. These projects collectively aimed to provide coverage to thousands of residents and businesses, ensuring better digital access.
USF Projects in Khyber Pakhtunkhwa
| No. | Project | Category | Service Provider | Subsidy Disbursed (PKR) | Targets Achieved & Other Costs |
|---|---|---|---|---|---|
| 1 | Chitral Lot | 2G | Telenor | 16,487,040 | OPEX Costs |
| 2 | Kohistan Lot | 2G | Telenor | 725,127,419 | 229 Mauzas Covered, CAPEX & OPEX Costs |
| 3 | Khyber Lot | 3G | Ufone | 70,736,238 | OPEX Costs |
| 4 | Mohmand Lot | 3G | Ufone | 622,756,495 | 437 Mauzas Covered, CAPEX & OPEX Costs |
| 5 | DI Khan Lot | 3G | Ufone | 22,649,730 | OPEX Costs |
| 6 | North Waziristan Lot | 3G | Jazz | 83,873,409 | 146 Mauzas Covered, CAPEX & OPEX Costs |
| 7 | Chitral Lot 2 | 3G/4G | Telenor | 1,097,668,042 | 486 Mauzas Covered, CAPEX Costs |
| 8 | Swabi Lot | 3G/4G | Telenor | 555,000,000 | 65 Mauzas Covered, CAPEX Costs |
| 9 | Swat Lot | 3G/4G | Telenor | 468,881,994 | 18 Mauzas Covered, CAPEX Costs |
| 10 | Bannu Lot | 3G/4G | Jazz | 201,531,667 | 117 Mauzas Covered, CAPEX Costs |
| 11 | Buner Lot | 3G/4G | Telenor | 1,999,232,929 | 102 Mauzas Covered, CAPEX Costs |
| 12 | Tourist Destination K1 | 3G/4G | Jazz | 196,876,286 | Mobilization Advance |
| 13 | Tourist Destination K2 | 3G/4G | Jazz | 170,222,129 | Mobilization Advance |
| 14 | NH&MW Lot-9 (N-35) | 3G/4G | Jazz | 491,604,802 | 37.43 Kms Road Segments Covered, CAPEX Costs |
| 15 | FATA Package-1 | Optic Fiber | PTCL | 84,491,128 | 132.99 Kms OFC Deployed, 3 THQs Connected, CAPEX Costs |
Additional USF Fiber Deployment Projects
| No. | Project | Type | Service Provider | Subsidy Disbursed (PKR) | Targets Achieved & Other Costs |
|---|---|---|---|---|---|
| 16 | KPK (FATA) Package-2 | Cable | PTCL | 1,505,791,727 | 742.54 Kms OFC Deployed, 37 THQs/Towns Connected, CAPEX Costs |
| 17 | UC-KP-LOT-17 | Cable | PTCL | 313,113,686 | Mobilization Advance |
| 18 | UC-KP-LOT-18 | Cable | Dancom | 913,402,291 | 283.11 Kms OFC Deployed, 27 UCs/Towns Connected, CAPEX Costs |
| Total Projects = | 18 | 9,529,447,012 | 1,600 Mauzas Covered, 37.43 Kms Road Segments, 1,159 Kms OFC Deployed, 67 THQs/UCs Connected |
Were PPRA Rules Followed?
USF has stated that all contracts were awarded through a competitive bidding process in compliance with Public Procurement Regulatory Authority (PPRA) rules. The process involved a Single Stage Two Envelope System, where technical proposals were evaluated first, and only qualified bidders advanced to the financial bidding stage. The contracts were awarded to the lowest financial bidders, ensuring that the projects remained cost-effective. Licensed telecom operators contributing to the USF fund were eligible to participate, with major players such as Jazz, Ufone, Telenor, Zong, PTCL, Nayatel, Dancom, and Wateen securing contracts for different projects.
Did These Investments Improve Digital Access?
The USF-led investments have undoubtedly contributed to expanding connectivity in KPK, however, concerns remain regarding the overall effectiveness and transparency of these projects. Repeated contract awards to the same operators have raised questions about whether the bidding process truly fosters competition. Additionally, independent assessments of project impact have not been publicly disclosed, making it difficult to evaluate whether these investments have delivered the expected improvements in digital access. Despite significant financial allocations, many underserved areas still face network reliability issues, highlighting the need for greater transparency and accountability in future telecom infrastructure projects.
Also read:
How USF Awards Telecom Projects – Ensuring Transparency or Encouraging Favoritism?
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