Zong accused of illegal spectrum use worth Billions despite expired license: Audit Report

ISLAMABAD: A daring audit report has exposed that M/s CM Pak (Zong) continued to exploit illegal temporary additional compensatory spectrum following the expiration of its 2G (GSM) license in October 2019 up to date, with a financial effect of Rs 53.547 billion.

A temporary one-year measure at first, the assignment was repeatedly renewed before finally lasting until the expiration of the license in 2019.

But as per the audit, Zong still utilized the spectrum illegally after 2019 and even utilized it to provide 4G LTE services, a blatant violation of the terms of its license, which limited it to 2G services and geographically specific territories.

According to the Pakistan Telecommunication Authority (PTA), the total amount of Rs 18.04 billion was payable by Zong in the period from October 2019 to October 2024 based on spectrum usage charges and exchange rates of currency.

Even after the Islamabad High Court rejected Zong’s petitions in August 2024, the spectrum is still in the operator’s possession. FAB and PTA have not implemented spectrum vacation or collected charges, citing that Zong has appealed in the Supreme Court of Pakistan, and enforcement may cause contempt of court owing to existing status quo orders.

Interestingly, Zong entered a fresh license deal with PTA on October 4, 2024, as per the orders of the Supreme Court, but did not make a financial agreement or relinquish the controversial frequency.

Repeated Audit Warnings Ignored

This isn’t the first time the issue has surfaced. The same irregularity was raised in previous audit reports from 2015-16, 2017-18, and 2019-20, with no substantial corrective action taken. The recurrence of such a serious regulatory violation has raised concerns about enforcement efficacy and regulatory oversight.

During the Departmental Accounts Committee (DAC) meeting on December 27, 2024, FAB was instructed to pursue the court case aggressively, but no concrete progress has been achieved so far, as per the last audit report.

Audit Calls for Prompt Action

The audit report calls for stringent follow-up of DAC guidelines, recovery of dues at the earliest, and regulatory accountability to avoid further loss of funds to the national exchequer.

With billions of rupees on the line and a large telecom player charged with overreaching by the regulators and violating the rules, all attention is now focused on the forthcoming Supreme Court ruling and the reaction of the PTA and FAB to defend the rule of law in Pakistan’s telecommunication industry.