The Pakistan Telecommunication Company Limited (PTCL) Group, which includes Ufone, is facing intense scrutiny following allegations of mismanagement and questionable ties with the government. The controversy erupted after a recent report highlighted significant issues within the telecom giant, raising concerns about its operations and relationship with government entities.
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While acknowledging that the government holds the ownership of PTCL with the majority of shares, IT and Telecom Minister Shaza Khawaja admitted that subsidiary Ufone is not sharing its loss-making balance sheet with the government. “Ufone is operationally under Etisalat. Therefore, the government is not responsible for its constant loss-making,” she said while talking to the media at a conference titled ‘5G and Beyond: Shaping the Future of Connectivity’.
The minister was asked about the reasons for continuous losses faced by the state-owned Ufone while other telecoms, including Zong and Jazz, witnessed a significant jump in profits in 2024. Ms. Khawaja added that since the operations of PTCL and Ufone were with Etisalat, the IT ministry was not responsible for its financial health. However, she said that the Government of Pakistan owned PTCL and Ufone was a subsidiary of PTCL, but Ufone’s balance sheet was not provided to the government.
Adding to the controversy, the report also pointed out the close ties between PTCL Group and the government of Pakistan. Several high-ranking officials within the company have previously held significant positions in government agencies, raising concerns about potential conflicts of interest. Critics argue that these connections may have influenced regulatory decisions and provided the company with undue advantages.
The minister stated that the Pakistan Telecommunication Authority (PTA) should provide the answer to Ufone’s weak financial standing. Incidentally, the minister also declined to respond to the query that there was no member of the IT ministry on the Ufone board and referred the question to the secretary of IT, who confused the Ufone board with the PTCL board.
Meanwhile, addressing the conference, Ms. Khawaja presented the argument against auctioning the 5G spectrum, saying that it increases telecom companies’ business costs. This perspective aligns with the view that high spectrum costs can be passed on to consumers, potentially slowing down the adoption of 5G technology and hindering the implementation of relevant infrastructure development due to financial constraints. She stressed that Pakistan could learn from the experiences of other countries that have already launched 5G so that the same mistakes are not repeated.
The PTA organized the conference in collaboration with the telecom regulator of Malaysia and Nokia Pakistan. The situation has prompted calls for a thorough investigation into PTCL Group’s operations and its relationship with the government. Industry experts and consumer rights advocates are urging regulatory authorities to ensure transparency and accountability in the telecom sector. They argue that a fair and competitive market is essential for the growth and development of Pakistan’s digital economy.
As the controversy unfolds, PTCL Group and Ufone will need to address the concerns raised by the report and demonstrate their commitment to ethical business practices. The outcome of this situation will likely have significant implications for the future of the telecom industry in Pakistan.
