Pakistan Telecommunication Company Limited (PTCL) and Warid Telecom have caused a loss of over Rs. 100 billion to the national exchequer by offering 3G, 4G and LTE services without any license, said Auditor General of Pakistan (AGP) in its annual audit report.
The report said that Pakistan Telecommunication Authority was asked about the matter and was given a chance to respond on why it allowed both operators to offer 3G and 4G LTE services without any licenses, but due to unconvincing response, both the cases should be investigated properly, responsibility be fixed and disciplinary actions be initiated against those who granted permission to Warid and PTCL for provision of 4G / LTE services without spectrum and licenses.
It maybe recalled that PTCL and Warid have been offering high-speed wireless broadband services under the banner of 4G LTE, Charji, Nitro and EVO brands.
The audit report on the accounts of Telecommunication Sector for Audit Year 2015-16, a copy of which is available with ProPakistani, said that operators must obtain radio frequencies for offering a service, however, in case of PTCL and Warid, both operators kept offering high-speed broadband services without any licenses or spectrum.
Audit report said that PTA unlawfully allowed Warid for offering 4G LTE services to public at large. Report said that Warid was neither a Next Generation Mobile Services (NGMS) license holder nor participated in the auction of 3G/4G services.
Report said that this decision of PTA — for allowing Warid to offer 4G service without a license — resulted into loss of Rs 51,692 million (US$ 306.920 + 210 million) to the national exchequer.
Report said that matter was raised in last year’s report and PTA was given a chance to submit its reply to DAC (Departmental committee), however, PTA’s response wasn’t convincing.
During DAC held on 11th January, 2016 the Chairman PTA elaborated the details of auction and permission granted to Warid Telecom with facts and figures and categorically stated that PTA Authority owns full responsibility of reported auction which has been done in the best interest of the country.
Report said that Audit did not agree with the contention of PTA management as the case for permission was not presented before Federal Government being a competent authority for issuance of policy directives for NGMS.
Further, Warid Telecom did not participate in the auction of NGMS as required in the policy directives of the Federal Government. Therefore, DAC decided to place this para before PAC for final decision.
Therefore, Audit recommends that matter should be investigated, responsibility be fixed and disciplinary actions be initiated against those who granted permission to Wand for provision of 4G / LTE services and not getting approval from the Federal Government under intimation to Audit.
Report further said that PTCL is also 4G LTE through Charji Evo and Charji Evo Cloud devices to its customers without buying spectrum in 3G / 4G (NGMS) auction.
Report said that this offering from PTCL resulted into a loss of Rs 42,600 million to the national exchequer as PTCL did not participate in the auction of 3G/4G licenses.
Report said that PTCL should have bought the liceses just like Zong did by paying above mentioned amount during auction for provision of these services.
Report said that this issue was also raised and reported to PAO and management in September 2015. It was replied that licenses issued under the Deregulation Policy 2003 were technology neutral. Licensees could, therefore, deploy any advanced Technology while following the terms and conditions of the License.
Audit report said that this reply was misleading, therefore, not tenable as PTCL was providing 4G LTE services without getting license for the purpose.
DAC in its meeting held on 11th January, 2016 directed PTA management to provide final outcomes of the court case regarding provision of 4G / LTE services to DAC and Audit. No further progress was intimated till finalization of this Report.
Audit report said that based on these facts, it is recommending that the matter should be investigated, responsibility be fixed and disciplinary actions be initiated against those held responsible for allowing PTCL to operate 4G LTE services.
Moreover the loss of Rs 42,600 million be recovered and deposited in the Federal Consolidated Fund under intimation to Audit.
It must be noted that AGP audits every government department once in an year. Any objections raised in the audit report are discussed, briefed by concerned body in DAC (Departmental Committee). DAC then either dismisses the cases of refer them to PAC (Public Accounts Committee) for further investigation.
PAC, after reviewing DAC report, either assign the cases to relevant authority (NAB, FBR etc.) for further investigation or dismisses them for ever.