SCO Might be Allowed to Offer Telecom Services in FATA

The case for government of Pakistan’s approval for allowing SCO’s (Special Communication Organization) operations in FATA is under process with the Ministry of Information Technology and Pakistan Telecommunication Authority (PTA), we have checked with sources.

The extension of SCO’s operational mandate to FATA is recommended due to lack of telecom facilities in FATA and inability of private operators’ in providing telecom services under prevailing security situations.

Having said this, MoIT and PTA are evaluating SCO’s technical and after sale support abilities in areas where it is already serving before granting it further access in FATA.

The SCO was established in July 1976 on the directive of the then Prime Minister of Pakistan and was entrusted to plan, develop, operate and maintain telecom infrastructure in Azad Jammu & Kashmir (AJ&K) and Gilgit-Baltistan (GB).

This responsibility was shifted to SCO from Telephone & Telegraph (T&T) Department working under Ministry of Communications, mainly due to its failure in providing desired telecom facilities in the area and especially in winter season.

T&T staff used to migrate to mainland Pakistan during winters, abandoning the telecom setups due to heavy snow and unbearable living conditions. Owing to strategic importance of these regions, difficult terrain and weather conditions, Army was considered more suitable to take on this challenge.

Even the Prime Minister himself remained out of communication with rest of the country whenever he visited these areas. Consequently, responsibility for provision of communication in AJK and GB was assigned to the Army. In this backdrop, SCO was raised and it is since then offering telecommunication services in the region.

SCO maintained its exclusivity in the area of AJK and GB till 2005. However, during the earthquake of 2005, private telecom operators were allowed to extend their services in these areas. Following de-regulation of telecom sector in 2006, other mobile operators (OMOs) were issued licenses by PTA to formally operate in AJK and GB.

In the light of (section 40 of) telecom act, PTA had issued basic telephony and mobile service licenses to SCO in 2000 and 2003 respectively for its operations in AJK and GB. The licenses awarded to SCO by PTA also included “Employment of SCO to other areas which may be entrusted to SCO by Government of Pakistan and also acknowledges the special status of the area of operation of SCO, its difficult terrain and climate and its sensitivity to defense matters”.

Total customer base of SCO in AJK and GB is currently 971,617. Service wise breakdown is comprised as following:

  • PSTN: 61,819 customers
  • GSM: 850,444 customers
  • WLL: 51,000 customers
  • DSL: 8,247 customers
  • DXX: 107 customers

As per information that is exclusively available with ProPakistani, SCO maintains following telecom assets in AJK and GB:

SCO_Assets

According to the latest figures exclusively available, SCO has successfully achieved overall assigned revenue targets above 100% in the last 10 years. Revenue realization compared to recurring expense is also on plus side. Summary of revenue targets assigned to SCO by Finance Division vis-à-vis achieved and recurring expense vs revenue deposited in national exchequer during the last ten years are as under:-

Revenue Targets Assigned Vs Achieved.

  • Targets assigned from year 2005 to 2015: Rs 15,300 Million
  • Targets achieved from year 2005 to 2015: Rs 16,315 Million
  • Targets % achieved by SCO: 107%

Recurring Expense vs Revenues Deposited

  • Recurring expenditure from year 2005 to 2015: Rs 16,712 Million
  • Revenue realized from year 2005 to 2015: Rs 16,315 Million
  • Surplus deposit: Rs 397 Million in 10 years

However, in the last two years, recurring expense is on higher side as compared to the revenue realized mainly due to lesser budgetary allocations for development projects through PSDP, increase in operational expenses / services, substantial increase in salaries in the past years and few regulatory impediments especially with respect to handling of international traffic.

Nevertheless, completion of Pak-China OFC Project in the future and award of LDI license shall further boost the revenue earned by the organization.

Revenue Target for the current fiscal year 2015-16 is Rs 2,300 million, while Revenue (Gross) earned by SCO till December is about Rs 800 million.