Utilization of USF Money: $840 Million Lying with Government to Fill Budgetary Deficits

Universal Service Fund in Pakistan has generated over US$ one billion (Rs. 100 billion) since its creation in 2006, however, just $160 million (or merely 16% of the total fund) were used for the purpose they were collected for, while remaining US$840 million is lying with the government un-used or say for no good use, revealed Parvez Iftikhar, former CEO of USF Pakistan, in a blogpost.

Status of USF Pakistan Funds (Approx)


Universal Service Fund was created as per Telecom Act of Pakistan as a company that is suppose to ensure the availability of ICT services in un-served and under-served areas of Pakistan by subsidizing network roll-out and services.

USF is primarily funded by 1.5% of annual revenues of cellular companies and they have been paying this share since the fund was created in 2006.

However, after eight years of its creation, it is apparent that a huge chunk of fund remains un-utilized and instead the money is now lying with the government that it uses to fill its budgetary deficits.

Parvez Iftikhar, the most authoritative individual on USF in Pakistan who has actually helped several countries around the globe in setting up the USF fund, argues that efforts should be made to utilize such a huge fund (which is actually 0.3% of Pakistan’s 2013 GDP) in deploying ICT connectivity and services (real ICT services) in rural areas at a much faster pace.

“It is obligatory upon all of us to do our best to improve utilization of these funds as this still gives us the best chance to bridge that ever increasing digital divide – at least to an extent, if not fully”, said Parvez Iftikhar.

Interestingly, cellular companies have never voiced against the (ab)use of USF money, that is essentially funded by them. Instead they tend to remain silent on the matter and leave it to the government to decide the fate of several hundred million dollars.

Parvez Iftikhar, for the sake of argument, also discusses that there is not point of maintaining a fund if it is not used.

While referring to India, which recently slashed its USF levy from 5% to 3% of the annual adjusted gross revenues of telecom operators, Mr. Iftikhar said that Pakistan can either think of lowering the USF contributions from operator or simply stop collecting the USF levy until the previous fund is consumed properly.

“Since the USF collections are now being diverted to the Government (Federal Consolidated Fund), instead of helping the unserved areas.

Does that raise questions if the USF levy in Pakistan (a very reasonable 1.5%) should also be brought down further? Perhaps even discontinued for the time being?”

It is sad to see a USF evangelist like Parvez Iftikhar raising such questions. This shows that there is something seriously wrong with the utilization of USF fund and that the concerned authorities must pay the due attention to revive the work that USF is mandated to do.

Ironically, according to International Telecommunications Union (ITU), Pakistan remains one of the least connected countries and ranks 142nd on a global ICT index of 166 economies. This shows that how behind we are and how incompetent our authorities have become in combating our national deficiencies.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK

    • @Khan Ironically most of 160 Mln (aprox 75%) utilized so far, was utilized during that time!
      I wanted to mention it in the blog but then I didn’t because I did not want it to look like an effort at self-projection. My sole objective is that the fund should be used to develop ICTs in Pakistan’s rural areas.

  • only Four crores required for annual rent of executive floors of Habib Bank Tower plaza in Blue Area, Jinnah Avenue .

  • Fixing responsibility for 18th Month negative Progress of Information Technology in Federal Government, Pakistan.

    Ministry of Information Technology is still hiding its 18 months progress and shifting blame to Previous Governments.
    Ministry of Information Technology need to define its vision and resolve issues of formation of Information Technology Policy, Youtube blockage issue, Grey Traffic, promotion of software industry for GDP growth, cyber law and formation of IT Cadre. The Ministry badly failed to progress as it has no vision and lack of capacity to address these issues. Ministry defined its mission on its website as;
    “To create an enabling environment through formulation and implementation of policies (1) and legal framework (2); providing ICT infrastructure (3) for enhancing productivity (4); facilitating good governance (5); improving delivery of public services (6) and contributing towards the overall socio economic growth of the country (7).”

    (1) Ministry has an outdated IT policy (2002) and failed to define one in 18th Months.
    (2) No legal framework till date.
    (3) On ICT infrastructure Ministry is blaming EGD/PCB for providing infrastructure in the past, there is no PSDP projects in the pipeline for provision of infrastructure so far, moreover in 18 months Ministry was only able to make an expenditure of 0.5 million in the head of IT infrastructure in development budget.
    (4) No input no output, nil expenditure for enhancing productivity, nil productivity.
    (5) What is happening under the buzz word Good Governance, IT Minister is not an IT literate, government has appointed an IT State Minister she speaks English well and has no experience of IT or heading any office. Why she has been given IT Ministry is itself a mystery. There is no Secretary IT, Joint Secretary Development and under her all departments’ heads are assigned on additional charges. May be beside her husband there is no qualified person in Pakistan.
    (6) No PSDP project for public delivery improvement in 18 months.
    (7) What is socio economic growth of the country without development budget?

    It seems that the Ministry is headed by non IT professionals and has only plan to enjoy perks. 80% of the employees of the departments of Ministry of IT are petitioners in various cases against Ministry in Islamabad high court. 90% of IT employees are not given salaries for 13 months. No one is accountable for this good governance and incumbent IT State Minister is only busy in media promotion. She is keeping a sixteen member IT team, headed by director IT for her media promotion only.

    The Ministry has to inform the nation what are plans to promote IT in the country or may be after 32 more months, When will it develop IT plan? What is the progress of Member IT and Director IT who are drawing salaries of MP-I and II of Rs. Rs. 350,000 to 450,000/ month from the poor taxpayers’ pockets? What were the TOR for them? Where are the IT Policy and framework and IT cadre. Is the Ministry of IT has adopted IT.

    Ministry’s IT Wing is headed by fake certificates holder Director IT and has given additional charge for IT departments. He managed to amend the TOR of Director IT as he was working as acting charge of Director IT in IT Ministry and managed to grab the position. The TOR was hidden from the public so advertisement published was also illegal can be found at the link http://www.jobinpk.com/director-it-mp-ii-job-ministry-of-it-telecom-28-april-2013/. The details were not available at the link as defined in the advertisement also given below. The experience certificate submitted were fake and is not available in the record of Ministry IT. The incumbent Director IT nor could write or read 4 lines of English and has no prior experience of heading an organization or a higher management position. Who is responsible for this good governance? He works as analyst (BPS.17) in Ministry IT for 5 years, in PTCL as assistant web developer and claimed to have worked in Saudi Arabia as network assistant, which are all entry level positions and having no management experience at all.

    Pakistan must wakeup now and learn from Bangladesh, India and other developing countries to select the right path of e-Governance. Experimentation is like reinventing the wheel again. We are going against the direction, IT is moving in the world. I request you all to raise your voice for the appointment of IT literate Minister, capable IT leaders and strict punishment for fake IT experts.


    Muhammad Ali

  • OMG, You are very right Ali. I was surprised to see him as Director-IT. The person is even rejected for the position of PROGRAMMER in Ministry of IT. IT Minister sa zyada Legal Minister ki zarorat ha MOIT ko. Actual culprits are the management on key posts, they put wrong cases to the minister. Minister should take notice on non-compliance of rules and to get rid of these black sheep. We all must play our role and identify such irregularities.

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