National Assembly Standing Committee on Information Technology and Telecom recently convened to address a significant issue affecting Pakistan’s telecommunications industry—the outstanding Rs. 78 billion owed by Long Distance and International (LDI) telecom companies. PTA Chairman presented three potential strategies to tackle the problem: depositing the entire outstanding amount into an escrow account, recovering the dues in installments, or suspending the companies’ licenses.
The first option presented by the PTA Chairman involves a lump sum deposit into an escrow account, requiring the LDI companies to pay the entire amount upfront. This would ensure immediate recovery of the dues, but it may be difficult for the companies to meet the financial demands all at once. The second option proposes negotiating installment plans for repayment. This more flexible approach could ease the financial burden on the companies, allowing them to pay the outstanding dues over a more extended period. However, this option also comes with the risk of continued delays in payment, potentially prolonging the issue further.
The third and most drastic option is the suspension of the licenses of the LDI companies, which would have severe consequences for the telecommunications sector. A suspension of licenses could lead to up to 50% disruption in ATM services, as the banking infrastructure in the country is heavily reliant on the services provided by the LDI companies. This would have far-reaching implications for businesses and individuals who depend on these services for financial transactions, highlighting the delicate balance the PTA must strike in resolving the issue.
Barrister Gohar, a legal expert who was present at the meeting, expressed concerns about the potential leniency shown towards the companies, especially since many of them generate substantial revenue in foreign currencies. He stressed that installment-based repayment should be considered only as a last resort. Barrister Gohar emphasized the need for a more decisive approach to ensure the recovery of the dues, considering the massive amount involved and the prolonged period of non-payment. The outstanding principal amount owed by the companies stands at Rs. 24 billion, with an additional late payment surcharge exceeding Rs. 50 billion. These dues date back to the period between 2008 and 2011, making the situation even more pressing.
The Committee Chairman, concerned about the slow progress of resolving this issue, inquired whether the case could be moved to the Telecom Tribunal. However, officials from the Ministry of IT confirmed that the Telecom Tribunal has not yet been activated. This lack of a functioning tribunal has hindered the progress of resolving the matter efficiently. The Chairman has asked for a detailed report on the activation of the Telecom Tribunal in the next meeting, urging the ministry to expedite its establishment.
The committee stressed the urgency of resolving the situation, given the critical role LDI companies play in the country’s telecommunications and banking sectors. The PTA is now faced with a pivotal decision on how to recover the massive outstanding dues while minimizing disruption to essential services. While the PTA’s efforts to address the issue are ongoing, the committee’s deliberations highlight the importance of a swift resolution to ensure the continued stability of Pakistan’s telecommunication infrastructure.
As the issue remains unresolved, the PTA must carefully navigate the competing priorities of recovering the owed amounts and safeguarding vital services. The next steps in this process will likely have significant implications for both the telecommunications and banking sectors in Pakistan. With the potential for further delays, stakeholders will continue to closely monitor developments in this high-stakes issue.
