Attorney General of Pakistan Consulted for Controversy Around SCO License

Ministry of Information Technology and Telecommunication has sought the Attorney General of Pakistan’s opinion on the matter pertaining to the Special Communication Organization (SCO).

This was after the Law and Justice Division declared that in light of Competition Act 2010, SCO had the right to be awarded a license for operating across the country.

Senate Sub-Committee on Delegated Legislation was briefed regarding the enhancement of the area of SCO operations.

The meeting was convened by Senator Advocate Muhammad Daud Khan Achkazai and was attended by Senator Kalsoom Parveen and officials from M/o IT & Telecommunications and Law Division.

The Ministry of IT & Telecommunication has requested to get the opinion of the Attorney General on the matter as it involves international commitments and stakes of the entire telecom sector.

The matter was deferred till the next meeting when the opinion of the Attorney General is received.

Convener of the Committee directed that steps shall be taken to obtain the opinion of the AG at the earliest.

IT&T Ministry has disputed the Law Division’s opinion saying that it would be in violation of the shareholder agreement with Etisalat and the Government of Pakistan, with serious consequences for their finances as well as for the overall telecom sector.

The matter has now been referred to Attorney General of Pakistan for seeking his view. In case, his view conflicts with the Ministry of IT&T, the matter would be sent to the Prime Minister who would take it to the Cabinet.

The amendments proposed by the SCO to enhance operations throughout Pakistan were disagreed upon by Ministry of IT as being against the stated policy of the government, international commitments and other commercial agreements in the telecom regime.

Ministry of Law and Justice’s official said that under section 39 of the Pakistan Telecommunication (Re-organization) Act 1996, a licence to PTCL was issued by the Pakistan Telecommunication Authority (PTA) in order to provide telecom services within Pakistan excluding Northern Areas and Azad Jammu & Kashmir, for a period of twenty five years. In terms of section 39 (3) exclusive rights of PTCL to provide telecom services within Pakistan was for a period of seven years.

Under section 40 of the Act ibid, SCO was issued a licence to operate and provide telecom services within Northern Areas and Azad Jammu.

It is important to point out that Section 40 of the Act in fact reiterates and reinforces SCO’s right to operate in the Northern Areas and Azad Jammu & Kashmir, to the exclusion of all other operators. However, the said provision cannot be interpreted as imposing a bar upon SCO to operate in Pakistan.

Ministry of IT is of the view that an LDI licence for SCO to operate within Pakistan cannot be granted in light of the agreement. Clause 10.2 of the agreement reads as follows:

GoP covenants with the investor that it shall not be concerned directly with any business in Pakistan which is competitive with or likely to be competitive with the business then carried on by the company provided that this restriction shall not apply to National Telecommunication Cooperation ration or Special Communications Organization to the extent of the business carried on by those businesses at the date of this Agreement.

The agreement containing clause 10.2 was executed when SCO was already in existence operating. Hence, parties were fully aware of the matter and there exists no specific provision or mention in the Share Purchase Agreement that SCO shall not be granted any license for any category of service or technology leading to provision of telecommunication services.

Furthermore, the restrictive covenant in Clause 10.2 of the Shareholders Agreement, unless exempted under Section 5 of the Act cannot bar SCO from seeking and being granted a LDl licence for Pakistan.

Moreover, Clause 10.2 is in conflict with section 3 of the Competition Act, 2010. It is important to point out that the agreement itself contains a provision that it shall be governed by the laws of Pakistan. Clause 29 of agreement reads as follows: “This Agreement is governed by the laws of the Islamic Republic of Pakistan”

Hence, any provision of the agreement which is not in conformity with the laws of Pakistan or in conflict with any provision of the enactment would be treated as invalid. Act of 1996 is the binding authority on the issue. Any subsequent contractual obligation which is governed by the laws of Pakistan shall be in accordance with the aforesaid Act.

The Act of 1996 has given absolute power to PTA to grant licences. As PTA is an autonomous body, it should also examine the issue and refer the case to Ministry of IT. As per the note of Ministry of Information Technology referred to this Division, no referral has been made to PTA.

  • All the fuss about law is basic and good. But for a reader you should have mentioned the effects of granting license to SCO upon Telecom sector.

  • Lol. Ufone aka PTCL aka Etisalat is already in big trouble. As per IM for 3G/4G auction in 2014 issued by PTA all 3G license holders had to expand its 3G coverage to 90% of Tehsil H.Qs all over the country within next 4 years. And this 4 year timeline is closing in coming April and Ufone is far far behind of this target. Infact they do not have money for further expansion at the moment.

      • Ufone providing speed of 2G in 3G Money, In UAE the same price they pay for 4 MB and getting fastest speed,whereas in Pakistan PTCL Failed to provide due to their old lines, system which they hardly replaced with new system but after 5-10 years.

    • Zafar it is not directly related to the topic but based on your knowledge and experience in telecom, I would like to ask ufone doesn’t have 4G license and yet they claim to provide 4G LTE on Charji Devices (do they use some other network in these particular devices or its just fake advertisement)

      Kindly share if you have any information related to this.

      • Ufone is not providing Charji LTE, Its Ufone’s parent company PTCL who is providing Charji services on MBB devices. And Charji services are not available for Ufone users through roaming as well.

        PTCL has WLL spectrum in 1900 MHz and 3500 MHZ. since all spectrums are technology neutral as per new Telecom Policy, PTCL is providing EVDO 3G on 1900 MHz and LTE on 3500 MHz in selected regions. Charji has nothing to do with Ufone.

  • People especially in SWAT Valley, telecommunication coverage is still the issue. Personally i experienced, ARMED Forces check post team complaint about ZONG Coverage in the area during my visit to SWAT- Kalam.
    SCO definitely play a good job in those areas, where other operators hesitate to provide their services. Atleast 2G is mandatory.

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