According to sources, payments of 80 billion Pakistani Rupees in Adjusted Gross Revenue (AGR) dues from 2009, 2010, and 2011 by Local Loop (LDI) operators are being further delayed, putting the future of Pakistan’s telecom sector at risk. The Pakistan Telecommunication Authority (PTA) has been criticized for being a “silent spectator” in the dispute.
Companies Use Courts to Avoid Payment
The defaulting LDI companies are reportedly using the judiciary to avoid their financial obligations and have gone to the extreme in their disregard for payments and settlements. They have also failed to pay their outstanding license fees from last year, with PTA officials confirming that these companies are operating illegally without valid licenses.
PTA officials claim their hands are tied, stating, “We can’t do anything.” When asked if a 5G launch was possible under these circumstances, they said it would be difficult for foreign investors to enter Pakistan. The officials added that the launch of 5G licenses is now under a cloud of uncertainty, as the market cannot grow without new players.
Pakistan’s Telecom Market Labeled “Unparalleled”
The officials believe that growth will stagnate because LDI operators are continuing their business by obtaining stay orders from the courts. These practices have resulted in a significant reduction in foreign exchange earnings from the telecom sector.
IT experts claim that the situation in Pakistan is unparalleled globally. They say that poor governance is causing the national treasury an annual loss of billions of rupees. Other major telecom operators are also considering working on renewed licenses with stay orders.
PTA Issues Directives, Companies Refuse to Comply
The PTA had previously directed six companies to pay their outstanding dues within 30 days and had forbidden them from approaching a legal forum. However, Redtone, Wateen, and Telecard took the matter to the Sindh High Court.
After hearing the LDI companies, the PTA issued orders, including a directive for Wateen Telecom to pay 6.25 billion Rupees. Wateen Telecom challenged this order in the Sindh High Court, claiming it was a breach of promise. Redtone was ordered to pay the highest amount, 14.31 billion Rupees. The PTA held separate hearings for each defaulting LDI company, and renewal of their licenses was contingent on the payment of their dues.
However, Wateen, Redtone, and Telecard have not paid their outstanding dues or the penalties, and all three LDI operators have now refused to pay the amounts.
