Rs68 billion losses detected in PTA audit
By Khawar Ghumman
ISLAMABAD: At a time when the Indian government is rocked by a $40 billion scandal in its telecom sector, federal auditors in Islamabad have unearthed a loss of Rs68 billion in the telecommunication sector of the country.
However, there is a marked difference between the two stories.
In India, licences were sold to cellphone operators at shockingly low prices, which cost the government heavily while in Pakistan the telecommunication sector has failed to utilise it to generate revenue despite the availability of enough wireless local loop (WLL) spectrum to be auctioned.
In a report on the accounts of the telecommunication sector for 2010-2011, auditors have highlighted three audit paras which shed light on the Pakistan Telecommunication Authority`s failure to cash in on availability of WLL spectrum in the country.
In total, auditors have put over Rs68 billion losses to the exchequer.
The report was presented in the National Assembly during its last session on July 22, which will be taken up by the Public Accounts Committee in its future meetings.
As per findings of the report, the Pakistan Telecommunication Authority presented a proposal about auction of WLL spectrum in 1900 megahertz (MHs) band during its 35th board meeting on Jan 11, last year.
The board approved the auction of the available spectrum. However, the available spectrum was not auctioned as decided in the meeting, causing a loss of Rs66.112 billion to the exchequer. The loss was calculated on the basis of previous auction of WLL frequencies.
The report said the frequency allocation board (FAB) had made available these frequencies to be auctioned, but the Pakistan Telecommunication Authority didn`t carry out the auction process, causing loss to the exchequer.
The audit pointed out this mismanagement to Pakistan Telecommunication Authority authorities in November last year.
In response, the audit was informed that under provisions of the Pakistan Telecommunication (Re-organisation) Act 1996, the board has assigned the frequency segment in 1900MHs band for auction to WLL operators.
But the reply was not accepted by the audit because it said the auction of 1900MHs band as directed by the FAB was purely the PTA`s responsibility.
The report said that if the band had been auctioned on time, it would have fetched the government substantial revenue.
The departmental accounts committee asked the PTA management to facilitate the process of auction, but no progress has been reported on the subject till compilation of this report.
During the PTA board meeting, a separate presentation was made on commercial and non-commercial aspects of the spectrum in 3.4-3.6 Gigahertz (GHs).
The board decided that after sparing 14 MHs bandwidth for the use of Pakistan Army in the available bandwidth of 3.4-3.6GHs, rest of the bandwidth would be auctioned to all telecom regions.
When the audit examined minutes of the meeting, it was revealed that the spectrum was not auctioned. This cost Rs1.048 billion to the exchequer.
The report said the government would have received revenue on account of annual dues if the available spectrum had been auctioned on time. The audit calculated the loss on the basis of previous rates because the FAB management didn`t provide current rate of frequencies to the auditors.
In response to the audit objection, the PTA replied that the board had assigned the frequency segments for auction to WLL operators under the Pakistan Telecommunication (Re-organization) Act 1996.
The audit rejected the response and said the operators were PTA`s licencees, and their record of licensing, recovery of spectrum charges was held by the PTA. Therefore, the authority is responsible for the auction.
In a departmental level accounts committee meeting on Jan 3, the PTA was directed by the audit officials to expedite the process of auction, but no progress has been reported till finalisation of the report.
In another audit para, non-receipt of Rs642 million of spectrum charges from Pemra on account of broadcasting spectrum and FM licensing has been reported.
The record of frequencies with bid price for auction revealed that an amount of Rs642 million was recoverable from broadcasting operators.
The licences were auctioned by Pemra, but the fee on this account has not been received by the FAB. The audit has asked authorities concerned to recover the amount.