Audit exposes Rs. 389 million PTA failure to recover from Telecom operators

The Auditor General of Pakistan has accused the Pakistan Telecommunication Authority of not recovering Rs. 389.219 million in outstanding dues from telecom operators for services under the head of Universal Service Fund, and R&D contribution and Annual License Fee and Annual Radio Frequency Spectrum Fees that apparently lie within the coverage of their license agreement.

Report has stated that a telecom operator must pay 1.5 percent and 0.5 percent of the gross annual revenue generated into USF and R&D respectively, in addition to the payment of 0.5 percent of the revenues through ALF within 120 days after the closure of each financial year. Any untimely payment incurs 2 percent monthly penalty, which accumulates to an amount payable to PTA.

The audit found that the PTA has an amount of Rs. 414.39 million in receivables comprised of unreceived contributions towards USF, R and D, ALF, ARSF, and penalties on three operators relating to poor service quality. While the amount collected was a huge amount of Rs. 25.17 million, outstanding an enormous amount of Rs. 389.218 million was outstanding. USF and R&D: Rs. 191.74 million; ARSF: Rs. 125.91 million; ALF: Rs 40.80 million, and service quality fines of Rs 23 million.

The audit criticized PTA’s weak financial management which was described as failure to collect these dues within the required time frame. In response to this, the PTA admitted that some operators had paid directly to the Minister of Information Technology and Telecommunication (MoITT) though these amounts were still to be confirmed. The PTA also mentioned legal issues, claiming that several operators have obtained stay orders from the Islamabad and Sindh High Courts.

The Auditor General rejected PTA’s explanation but impressed that the amount of Rs 389.219 million is yet to be recovered and demanded for immediate recovery. The Departmental Accounts Committee when it sat on December 20, 2023 asked PTA to enhance its recovery activities and all pending court cases to ensure due facts and documents are placed before court.

The audit report suggested strictly following the directives of the DAC to clear legal hurdles, and the remaining due amount should be recovered from telecom operators to meet financial deficits. By the time the audit report was finalized, there was nothing remarkable done.