Zong Ordered to Refund Over Rs 2 Billion to Customers

In a landmark decision, the Islamabad High Court (IHC) upheld the Pakistan Telecommunication Authority’s (PTA) directive for Zong, one of Pakistan’s leading digital and telecommunication service providers, to refund over Rs 2 billion to its customers. This ruling reinforces consumer rights in Pakistan’s telecom sector and holds companies accountable for unjust charges.

Justice Mian Gul Hassan Aurangzeb dismissed Zong’s appeal against the PTA’s order, confirming that the amount collected in service and maintenance fees was unlawful. The court instructed Zong to refund Rs 2,028,038,584 (more than Rs 2 billion) charged from customers between April 26, 2019, and July 12, 2019.

Zong Ordered to Refund Over Rs 2 Billion to Customers

The court highlighted that cellular operators, including Zong, had been deducting Rs 10 from customers each time they loaded a prepaid card worth Rs 100 under the guise of service, maintenance, or administrative charges. Justice Aurangzeb emphasized that such charges lacked legal justification, aligning with an earlier Supreme Court ruling that deemed these deductions invalid.

As part of the decision, the IHC deemed Zong’s appeal “not maintainable” and directed the company to provide complete details of the service and maintenance charges recovered from customers during the specified period. PTA had earlier mandated Zong to refund the collected amount in the form of balance credit without imposing any validity restrictions, ensuring equitable compensation for affected subscribers.

This decision comes amidst growing concerns within Pakistan’s telecom sector regarding financial policies and taxation. Recently, the Pakistan Telecom Operators Association (PTOA) expressed alarm over the heavy taxes introduced in the 2024 budget. In a letter addressed to Senator Salim Mandviwala, Chairman of the Standing Committee on Finance, the association warned that unresolved tax issues could deter foreign investment and further strain the already beleaguered telecom industry.

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The letter pointed out that two major telecom operators are considering exiting the Pakistani market due to excessive taxation and regulatory challenges. Despite contributing PKR 340 billion in tax revenue last year and attracting USD 15 billion in direct investment over the years, the telecom sector faces an uncertain future if these issues are not addressed.

A Step Forward for Consumers but Challenges Remain

While the IHC’s decision marks a significant win for consumer rights and regulatory enforcement, it also exposes underlying issues in Pakistan’s telecom industry. Zong’s practice of imposing unlawful charges reflects a broader problem of accountability and transparency within the sector. However, the directive to refund such a substantial amount could strain the company’s financial position, potentially affecting its services.

Additionally, the industry’s concerns about heavy taxation and regulatory hurdles remain unaddressed. Without a collaborative effort between telecom operators and the government to create a fair and sustainable policy framework, the sector risks losing foreign investment and falling behind in technological advancements. The decision to refund customers should serve as a wake-up call for policymakers to prioritize a balanced approach that benefits both consumers and telecom operators.