PTA Caught Changing Long-Distance and International License Clauses Without Approval

The Auditor General of Pakistan has raised concerns over the Pakistan Telecommunication Authority (PTA) for allegedly altering the clauses of Long-Distance and International (LDI) licenses without the necessary approval from the federal government. The modifications, which involve the addition of new clauses 3.2.6 to 3.2.8 under the heading “Network Rollout Obligations,” were made to the LDI license issued to M/s Zeta Technologies (Pvt.) Ltd. on January 5, 2023. According to the Auditor General, this action violates the provisions of the Telecommunication Policy 2015 and De-Regulation Policy 2003. According to the audit report, Rule 5.2.3 of the Telecommunication Policy 2015 mandates that any changes to the licensing regime require consultation with sector stakeholders and approval from the federal government. Furthermore, Rule 4.2.1 (b) of the De-Regulation Policy 2003 stipulates that licensees can lease infrastructure from PTCL or other owners on non-discriminatory, mutually agreed terms, with long-term leases of five years or more acceptable in lieu of ownership. However, the PTA altered the LDI license template without adhering to these procedural requirements, sparking concerns over the implications for the telecom sector. The Auditor General argues that these unapproved changes could have a detrimental impact on the business of telecom infrastructure providers, potentially infringing upon the rights of licensees as outlined in Sections 5(b) and 6(a) of the Pakistan Telecommunication (Re-organization) Act, 1996. According to the audit report, these sections emphasize enforcement, monitoring, and protection of licensee rights. The changes made by the PTA without federal approval have raised questions about the transparency and legality of the regulatory process. The issue was brought to the attention of PTA management and the Principal Accounting Officer (PAO) in November 2023. PTA responded that the insertion of new terms in the LDI license template did not alter the scope of the license or the overall licensing regime. The authority justified the changes as part of efforts to enhance the percentage of fiber-to-the-tower/site (FTTT/FTTS), aimed at promoting the modernization of telecommunication systems and services. However, the Auditor General found this explanation unsatisfactory, arguing that such changes should have been made in consultation with stakeholders and with federal government approval. The matter was discussed in the Departmental Accounts Committee (DAC) meeting on December 20, 2023, where the DAC directed PTA to share the results of its review with the Cabinet Division and have them verified by the Audit. As of the finalization of the report, no further progress has been made.