ISLAMABAD (Zubair Kasuri): Pak Datacom Limited has confirmed that satellite connectivity services for the National Bank of Pakistan, Oil and Gas Development Company Limited, AGPR/PIFRA and other key state institutions were migrated from Pakistan’s domestic PAKSAT network to YahClick, a satellite broadband service operated by the UAE-based Yahsat.
The company maintained that the migration was carried out due to technical necessity, the availability of a commercially viable alternative and approval by its Board of Directors. It also said the relevant authorities and client institutions were informed about the arrangement.
Pak Datacom rejected concerns about the security of sensitive government communications, saying the networks were protected through virtual private networks, encryption and multiple layers of security. According to the company, these safeguards prevent unauthorised access, data theft or misuse of customer communications.
To verify the information and obtain the company’s detailed position, a correspondent representing Daily Jang and The News visited Pak Datacom’s Islamabad office and held a meeting with Acting Chief Executive Officer Ali Saleem Rana, Hassan Abbas Ghaznavi of the VSAT department and senior official Qaisar Mahmood. The company subsequently provided a written response as well.
The officials confirmed that satellite connectivity for the government institutions had been migrated to YahClick. They said the decision was neither secret nor unauthorised and had been taken after considering the available technical and commercial options.
According to Pak Datacom, PAKSAT-1R reached the end of its operational life in 2026, after which the company approached PAKSAT International to migrate its networks to PAKSAT-MM1. It was informed, however, that the required Standard Ku-band capacity was not available on the new Pakistani satellite.
The company said it also considered Ka-band capacity as an alternative, but the entire Ka-band capacity on PAKSAT-MM1 had already been committed to Kacific, a Singapore-based satellite operator, and was therefore unavailable to Pak Datacom.
Another option involving Low Ku-band would have required the replacement of complete terminal equipment at approximately 500 locations. Pak Datacom said this would have involved capital and operational expenditure amounting to millions of US dollars, while the specialised equipment was not readily available in the local market.
The company consequently selected YahClick on the grounds that it offered suitable coverage, high-throughput satellite capability and a significantly lower migration cost. Its officials said satellite capacity is marketed and acquired differently from ordinary goods and services, and YahClick represented the best available technical and commercial option at the time.
Pak Datacom officials told the correspondent that the company currently operates approximately 250 active sites for different institutions. They claimed that Supernet, Redtone, Wateen and other operators collectively run around 5,000 sites across Pakistan through foreign satellites. These figures were provided by the company.
The complaint submitted by the former chief executive, however, stated that Pak Datacom had been providing satellite backup connectivity to more than 400 branches of the National Bank alone. The present management, during the meeting, placed the company’s current active network at approximately 250 sites.
Responding to the security concerns, Pak Datacom said YahClick services had been operational in Pakistan since 2015 through authorised local operators and partners. It claimed that government departments, financial institutions, defence and security organisations and other strategic entities were already using these services.
Company officials said customers’ original data was not stored by YahClick and the satellite was used only as a communications medium. They maintained that the traffic was protected through VPN tunnels, encryption and other security protocols, making unauthorised access or misuse impossible.
When asked why an open tender was not conducted before selecting YahClick and why comparative offers were not obtained from other satellite operators, Ali Saleem Rana said the Public Procurement Regulatory Authority rules did not apply to Pak Datacom.
He said the matter had been placed before the company’s Board of Directors and YahClick was selected after receiving the board’s approval. The officials maintained that approval from the company’s board was sufficient for the transaction.
During the meeting, Rana also asserted that Pak Datacom was an autonomous commercial company with no administrative relationship with the government. An examination of the company’s corporate and ownership records, however, showed that this assertion was inconsistent with the documented governance structure.
According to Pak Datacom’s annual report, the company was incorporated as a private limited company in July 1992 but was converted into a public limited company on June 26, 1994. Its shares are listed on the Pakistan Stock Exchange.
Telecom Foundation holds 55.08 per cent of Pak Datacom’s shares, making it the company’s controlling shareholder. Pak Datacom’s own financial statements describe it as a subsidiary of Telecom Foundation.
Telecom Foundation is affiliated with the Ministry of Information Technology and Telecommunication. The Federal Secretary for IT serves as chairman of its seven-member Board of Governors, while the Additional Secretary IT is its vice chairman.
Telecom Foundation’s President and Chief Executive Officer, Syed Zomma Mohiuddin, also serves as chairman of Pak Datacom’s Board of Directors and heads the company’s Procurement Committee.
Pak Datacom, therefore, has a clear institutional and governance link with the federal government and the Ministry of IT through its majority shareholder, Telecom Foundation. Although it is not a government department and operates commercially through its own board and management, it cannot accurately be described as an entity having no relationship with the government.
Pak Datacom’s own annual reports also identify government departments as major customers and describe government-sector projects as an important part of its business. The company has provided services to the National Bank of Pakistan, OGDCL, AGPR/PIFRA and several other state institutions.
Section 2(54) of the Companies Act 2017 defines a public-sector company as one in which at least 51 per cent of the voting securities or voting power is held, directly or indirectly, by the government, a government agency or a statutory body, or where the government has the power to elect, nominate or appoint a majority of its directors.
The ownership and governance structure is also relevant to Pak Datacom’s claim that PPRA rules do not apply to its procurement. No document establishing an exemption from the public procurement regime or setting out the legal basis for such an exemption was provided during the meeting.
The matter was originally raised by Pak Datacom’s former Chief Executive Officer, shareholder and retired army officer Brigadier Syed Zulfiqar Ali. He submitted complaints to the Secretary Ministry of IT and Telecommunication, Pakistan Telecommunication Authority, Pakistan Space Activities Regulatory Board, Director General Telecommunication and PAKSAT International.
In his complaint, the former chief executive referred to Clause 25 of SRO 60(I)/2024, issued by the National Command Authority on February 2, 2024, and argued that priority was required to be given to available national satellite capacity.
He demanded that the networks of the National Bank, OGDCL, AGPR/PIFRA and other sensitive institutions be restored to PAKSAT and the locally established satellite hubs in Karachi and Islamabad. He also called for an inquiry and the determination of responsibility.
The complaint further alleged that equipment worth approximately $97,000 was imported for the project, attracting nearly Rs10 million in customs duties and taxes. It claimed that an additional amount of around Rs4 million was paid in demurrage charges because of delays. The complainant also raised concerns about the continuing outflow of foreign exchange for the use of a foreign satellite service.
Pak Datacom rejected the former chief executive’s allegations as unfounded. The company alleged that he had retained a company vehicle after leaving office and that its board had proposed adjusting the vehicle against his outstanding dues at a value of Rs4.4 million.
The company claimed that the former chief executive began making allegations against Pak Datacom following a disagreement over the proposed adjustment. It has also announced that it is initiating appropriate legal proceedings over what it described as unfounded and defamatory allegations.
