Pakistan’s telecom industry has asked the government to stop awarding public-sector contracts through direct Government-to-Government (G2G) deals without open and competitive bidding. The Telecom Operators Association (TOA), which represents major telecom companies and other stakeholders, says the current system is creating problems for private businesses and reducing fair competition in Pakistan’s technology and digital services market.
The association has formally approached the government and called for changes to the public procurement rules. It wants government departments and state-owned enterprises (SOEs) to compete on the same basis as private companies when they seek government-funded projects.
The telecom industry believes that public projects should normally be offered through a transparent bidding process. In its view, this would give more companies a chance to compete, help the government get better prices and services, and create more opportunities for local technology businesses.
The issue has become important because government departments are spending large amounts of money on IT, telecom and digital projects. Private companies say they should have a fair chance to participate in these projects instead of seeing contracts awarded directly to state-linked organizations.
Telecom Industry Raises Concerns Over G2G Contracts
The TOA has raised concerns about the use of G2G contracting under the Public Procurement Rules, 2004. The association says this method allows government organizations to award certain projects directly to state-owned entities without going through a normal open bidding process.
According to the telecom industry, this can reduce competition because private companies may not even get an opportunity to submit their offers.
The association argues that when one organization receives a government project without competition, the government may lose the benefit of comparing different companies, prices, technologies and service plans.
The TOA has therefore asked the government to review the rules and remove the provision that allows such direct contracting in situations where competitive bidding could be used.
The association believes that a more open system would benefit both businesses and government departments.
Private Technology Companies Losing Opportunities
One of the biggest concerns raised by the telecom sector is the effect of direct government contracts on local technology companies.
Pakistan has a growing number of IT firms, software companies, digital service providers and startups. Many of these businesses need local projects to test their products, improve their services and build a record of successful work.
Government projects can provide an important market for these companies. If a local company receives a major project, it can use that experience to improve its products and later approach customers in other countries.
However, the TOA says this opportunity becomes limited when government projects are directly given to state-linked organizations.
The association believes that local businesses should be allowed to compete for these projects. Even if a private company does not win every tender, the opportunity to participate can help businesses understand market requirements and improve their services.
For smaller companies, government contracts can also help them grow, hire more workers and invest in new technology.
Concern About Unfair Competition
The telecom association has also pointed toward what it sees as an uneven playing field between private companies and state-owned organizations.
Private companies have to operate under normal business conditions. They must manage their costs, raise funds, follow regulations and compete for customers.
State-linked organizations, on the other hand, may have certain advantages because of their connection with the government.
The TOA claims that some state-linked entities can benefit from regulatory support, special licensing arrangements or government backing that private companies cannot easily match.
The association says this can make competition difficult, especially when both private and state-owned businesses are trying to win projects funded by taxpayers.
From the private sector’s point of view, companies should be judged on their ability, price, quality and experience rather than their connection with the government.
Possible Impact on Innovation
The telecom industry has also warned that limited competition could hurt innovation in Pakistan.
Technology businesses need a competitive market to survive. Companies invest in research, new products and better services when they know they have an opportunity to win customers.
If government projects are regularly given to state-linked organizations without competition, private companies may become less willing to spend money on research and development.
The TOA believes that this could be especially harmful for Pakistan’s growing digital economy.
Technology changes quickly, and companies have to keep improving their products to remain competitive. New startups also need opportunities to enter the market.
According to the association, a government procurement system that encourages competition can help create a stronger technology industry. Companies would have more reasons to develop new solutions and offer better services.
Competition Can Improve Efficiency
Another concern is efficiency.
The TOA argues that companies operating in a competitive market are under constant pressure to provide better services at lower costs. If several companies are competing for the same government project, each one has to offer a strong proposal.
This competition can help the government compare different options before spending public money.
The association believes that organizations protected from competition may face less pressure to reduce costs or improve services.
It referred to several state-owned organizations, including Pakistan International Airlines, Pakistan Steel Mills and power distribution companies, while making its broader argument about the challenges faced by state-owned businesses.
The telecom industry says the government should be careful about creating situations where state-owned organizations compete directly with private companies while also receiving special support from the state.
Effect on Jobs and Young People
The TOA has also connected the issue with employment.
Pakistan has a large young population, and the technology and telecom sectors are important sources of jobs for educated people. Software developers, engineers, digital marketers, technicians and other skilled workers depend on the growth of private companies.
Small and medium-sized enterprises, commonly known as SMEs, also play an important role in creating employment.
When these businesses receive new projects, they can expand their teams and hire more workers. But if they are unable to access major government opportunities, their growth can become difficult.
The association believes that giving private companies a fair chance to compete for public projects could support business growth and create more jobs.
For Pakistan, this is particularly important because the country needs more private-sector employment opportunities for its young workforce.
Private Businesses Also Face Financial Problems
The TOA has raised another issue related to government borrowing and financing.
When the government needs money for large projects or to manage its financial needs, it often borrows from the domestic market. Commercial banks may prefer lending to the government because government debt is generally considered a safer investment.
The association says this can create problems for private businesses.
If banks put more money into government securities, less financing may be available for private companies. Small businesses can then find it harder to obtain loans for expansion, new equipment, technology or hiring.
Higher borrowing costs can make the situation even more difficult.
The TOA argues that Pakistan needs a business environment where private companies can access both government opportunities and affordable financing.
Questions Over Subcontracting
The telecom industry has also raised concerns about what happens after a G2G contract is awarded.
According to the association, there are cases where a state-owned organization receives a government project directly and later gives some of the work to private companies.
The TOA says this can create another problem because the original project was not openly offered to all eligible businesses.
In such a situation, private companies may still end up doing the work, but they do not get the opportunity to compete directly for the main contract.
The association believes this can weaken transparency and make it harder to know whether taxpayers are getting the best possible price and service.
It has therefore called for greater transparency at every stage of government procurement.
Government Procurement Should Be More Transparent
The central demand from the telecom industry is simple: government contracts should be awarded through a fair and transparent process whenever possible.
Open bidding allows different companies to compete. Government departments can then compare their prices, technical skills, experience and proposed solutions.
This process can also make companies work harder to provide better offers.
The TOA believes that competition can benefit the government as well as private businesses. When more companies compete, government departments have more choices before making a final decision.
The association is not only asking for more opportunities for telecom companies. Its wider argument is that Pakistan’s private technology sector should be given room to grow.
Prime Minister’s Position on Government Businesses
The TOA also referred to Prime Minister Shehbaz Sharif’s publicly stated position that the government should not be involved in running businesses.
The association used this point while discussing the growing role of state-owned organizations in commercial activities.
It argued that many SOEs were created using public resources and taxes paid by businesses and citizens. If these organizations then receive direct government contracts and compete with the private sector, private businesses may face an additional disadvantage.
The association believes that the government should focus on its role as a regulator and policymaker while allowing private companies to compete in commercial areas where they can provide services.
What the Telecom Industry Wants
The TOA wants the government to reconsider the rules that allow direct G2G contracting.
Its main demand is that government projects in IT, telecom and digital services should be opened to genuine competition wherever there is no strong reason to use direct contracting.
The association believes that removing unnecessary barriers would give Pakistani companies more chances to grow.
It could also encourage businesses to invest in technology, research and new services. In the long run, this could support Pakistan’s digital economy and improve the country’s ability to compete in international markets.
A Bigger Debate About the Private Sector
The dispute over government tenders is part of a larger discussion about the role of the private sector in Pakistan’s economy.
Private businesses contribute through taxes, investment and employment. Technology companies also help bring new ideas and digital services into the market.
At the same time, the government owns and controls a number of organizations that operate in different sectors.
The TOA believes there should be clear limits on situations where state-owned entities compete with private companies while also receiving direct government contracts.
The association says a level playing field is important if Pakistan wants to build a strong and modern economy.
Conclusion
Pakistan’s telecom industry has formally asked the government to end or review direct G2G contracting that allows government projects to be awarded without open competitive bidding.
The Telecom Operators Association says the current system can reduce competition, limit opportunities for private companies, slow innovation and create problems for smaller businesses.
The association believes that open bidding can help the government compare different offers and make better use of public money. It can also give local technology companies the opportunity to gain experience, expand their businesses and create jobs.
The demand now puts the future of government procurement and the role of state-owned organizations in commercial projects under greater discussion.
For Pakistan’s growing digital economy, the industry says fair competition will be important. If private and public organizations are given a more equal opportunity to compete, businesses may have stronger reasons to invest, innovate and create jobs.
The government will ultimately have to decide whether changes are needed in the existing procurement framework. For the telecom sector, however, the message is clear: government-funded technology and telecom projects should provide a fair chance to capable private companies instead of being awarded directly without meaningful competition.
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