PTA wins the case: Supreme Court rejected PTCL appeal and PTA recovers 83 million

An interesting development happened when, after getting a service suspension directive from PTA, Pakistan Telecommunication Company Limited (PTCL) paid a pending fine of Rs. 83 million on emergency basis.

On the other hand, Supreme Court of Pakistan has also upheld an earlier decision of Islamabad High Court in which IHC had ordered PTCL to comply with PTA’s ruling of September 2011.

According to details, PTA issued an order 14-788/L&A/PTA/11 on January 7, 2014 directing the telecom company to suspend its WLL service in 5 regions including Lahore, Karachi, Islamabad, Rawalpindi and Multan which PTCL is using for providing EVO 3G wireless broadband as well.

The directive referred an earlier enforcement order that PTCL refused to comply with, back in September 2011, through which PTA had refrained PTCL from using spectrum for the WLL services that it had not purchased from government of Pakistan.

In December 2010, after receiving complaints from ISPAK and conducting a survey in the above mentioned 5 cities, PTA had sent a letter to PTCL identifying its criminal negligence of using extra spectrum than the allotted one for its WLL/CDMA services.

In April 2011, PTA issued a show cause notice to PTCL and a hearing was conducted by the authority in June 2011 before the watch dog fined the telecom giant with Rs. 83 million in September 2011.

PTCL challenged the order in Islamabad High Court and obtained an injunction order. The injection order was against the payment of penalties only but PTCL continued theft of illegal spectrum till today.

Using its commercial muscle and foreign backing, during all these years, PTCL has been using this extra radio spectrum for selling its EVO 3G broadband gadgets in Pakistan which has allowed PTCL to sell over 1.8 million EVO devices whereas all three Wimax operators have a combined subscriber base of under 400,000.

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According to PTA statistics, there are approximately 2.9 million broadband subscribers in Pakistan out of which PTCL holds almost 70% of market share.

Islamabad High Court, on December 3, 2013 upheld PTA’s earlier decision of convicting PTCL. In his order Chief Justice of IHC said,

“Bypassing of legal procedure (by PTCL in procurement of extra frequency spectrum) not only causes great loss to the national exchequer but also disturbs the level playing field amongst the players of telecom industry”.

PTCL further challenged the decision of IHC in the Supreme Court of Pakistan which has also turned down its appeal and upheld earlier decision of IHC.

An official of the telecom authority commented as, “The amount recovered from PTCL belong to a period prior to September 2012. PTCL kept using the spectrum illegally in the following years, for which, authority is in process of evaluating the amount of loss national exchequer had to bear due to PTCL in the later years”.

“PTCL may receive another penalty notice in the coming weeks pertaining to similar matter”, official added.

What would be the fate of millions of EVO 3G subscribers from whom PTCL keep receiving a quarterly line rent in advance at the time of sale?

We tried to reach PTCL’s spokesperson Imran Janjua for an official version on the matter but despite various attempts he avoided an official stance.

Officials of various telecom companies have appreciated PTA’s stance. CEO of NayaTel, Wahaj Us Siraj, said, “PTA, for the first time came very hard on PTCL which is a very good sign for the telecom industry in Pakistan. We hope that similar practice will continue and a true level playing field will be established that we had dreamt for at the time of privatization in 2005”.

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Head of Marketing at Wateen Telecom, Sohaib Sheikh says, “It’s a good omen that authorities in Pakistan are trying to safeguard the interests of smaller telecom players and the consumers. This will send a very strong message across the board and certainly it will prove fruitful in the future for FDI in telecom, particularly 3G licensing”.

Jawad Rizvi, a telecom journalist believed that use of illegal spectrum by PTCL has caused an overall loss of 10 billion to national exchequer. Authorities need to further investigate and recover the remaining amount from PTCL”.

Our Finance Minister should learn from this strong stance taken by PTA. If they can recover a pending amount by threatening to suspend the services, Government can also recover $800 million from Etisalat following a similar path” added Jawad.

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