Audit Exposes PTA for Failing to Recover Rs. 389 Million Dues from Telcos

The Auditor General of Pakistan has raised concerns over the non-recovery of Rs. 389.219 million in outstanding dues owed by telecom operators to the Pakistan Telecommunication Authority (PTA). According to the Audit Report for FY 2022-23, the dues remain unpaid despite clear guidelines in the telecom operators’ license conditions regarding Universal Service Fund (USF), Research & Development (R&D) contributions, Annual License Fees (ALF), and Annual Radio Frequency Spectrum Fees (ARSF). The audit report highlighted that license conditions mandate telecom operators to contribute 1.5 percent and 0.5 percent of their annual gross revenue to the USF and R&D, respectively, while also paying 0.5 percent of their annual gross revenue as ALF within 120 days of the financial year’s end. In addition, late payments incur a penalty of 2 percent per month, further exacerbating the outstanding dues owed to PTA. According to the report, the PTA headquarters under the Cabinet Division reflected a total of Rs. 414.39 million in receivables from USF, R&D, ALF, ARSF, and fines imposed on three mobile operators for poor service quality. However, PTA managed to recover only Rs. 25.17 million, leaving a significant balance of Rs. 389.218 million unpaid by telecom operators. Among the outstanding dues, USF and R&D contributions amount to Rs. 191.74 million, ARSF dues are Rs. 125.91 million, ALF dues stand at Rs. 40.80 million, and fines for poor service quality total Rs. 23 million. The audit report criticized PTA’s weak receivables management, pointing out its failure to collect the outstanding amounts within the specified timelines. In response, PTA acknowledged the situation but noted that certain operators had deposited amounts directly with the Ministry of Information Technology and Telecommunications (MoITT), for which PTA awaited confirmation. Additionally, PTA cited legal challenges, stating that operators had obtained stay orders from the Islamabad and Sindh High Courts, delaying further recovery. The Auditor General rejected PTA’s response, emphasizing that Rs. 389.219 million is still unpaid, and urged swift action. In a meeting of the Departmental Accounts Committee (DAC) held on December 20, 2023, the DAC directed PTA to expedite its recovery efforts and pursue pending court cases more vigorously, ensuring all facts and data are presented. The audit recommends that the PTA fully implement the DAC’s directives, resolve the legal hurdles, and recover the remaining balance from telecom operators to address the financial shortfall. No significant progress on the issue had been reported by the time the audit was finalized.