The Auditor General of Pakistan has raised serious concerns regarding the Pakistan Telecommunication Authority’s (PTA) unauthorized modifications to the Long-Distance and International (LDI) license clauses without the necessary approval from the federal government. This has sparked a debate about transparency and adherence to legal procedures within the country’s telecom regulatory framework.

The controversy centers on the introduction of new clauses—specifically, clauses 3.2.6 to 3.2.8—under the “Network Rollout Obligations” section of the LDI license issued to M/s Zeta Technologies (Pvt.) Ltd. on January 5, 2023. According to the Auditor General, these changes were made in violation of the Telecommunication Policy 2015 and the De-Regulation Policy 2003, which clearly stipulate that any alterations to licensing terms require federal government approval and consultation with relevant stakeholders.

The Telecommunication Policy 2015, particularly Rule 5.2.3, mandates that changes to the licensing regime must be approved by the federal government after consulting sector stakeholders. Additionally, Rule 4.2.1 (b) of the De-Regulation Policy 2003 allows licensees to lease infrastructure from PTCL or other owners on non-discriminatory terms, with long-term leases acceptable in place of ownership. However, the PTA’s unilateral changes to the LDI license template appear to bypass these important procedural safeguards.

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The Auditor General’s report highlights the potential negative impact of these unauthorized changes on the telecom sector, particularly on infrastructure providers. The modifications may infringe upon the rights of licensees as outlined in Sections 5(b) and 6(a) of the Pakistan Telecommunication (Re-organization) Act, 1996, which emphasize the enforcement, monitoring, and protection of licensee rights.

The issue was initially raised with PTA management and the Principal Accounting Officer (PAO) in November 2023. In response, the PTA defended the changes, asserting that they did not alter the scope of the license or the overall licensing regime. The authority argued that the modifications were intended to modernize telecommunication systems by increasing the percentage of fiber-to-the-tower/site (FTTT/FTTS) infrastructure.

However, the Auditor General found this explanation inadequate and insisted that such changes should have undergone proper consultation and received federal approval. The matter was subsequently brought before the Departmental Accounts Committee (DAC) on December 20, 2023, where the DAC instructed the PTA to reconsider the changes with the Cabinet Division and have them verified by the Audit. Despite these directives, no further progress has been made, leaving the issue unresolved and raising significant concerns about the transparency and legality of the PTA’s actions.