A shroud of financial mismanagement and political negligence surrounds Ufone, the perpetually loss-making subsidiary of PTCL, threatening to derail the proposed merger between PTCL and Telenor Pakistan.
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Sources within the Telecom Ministry told TaazaTaren that Ufone has become a critical liability, with its ballooning losses quietly absorbed by PTCL through cross-subsidization — a tactic that has not only drained PTCL’s resources but also deprived shareholders of dividends for years. Meanwhile, Ufone’s top brass and board members, including government nominees, continue to enjoy lavish perks and dollar-denominated fees, without accountability or scrutiny.
Despite having direct representation on Ufone’s board, government officials have consistently turned a blind eye to the company’s dismal financials. “Losses were simply dumped into PTCL’s books, shielding Ufone’s management from the consequences of its incompetence,” a senior official said.
The Competition Commission of Pakistan (CCP), now stepping in amid growing concerns, has begun a forensic review of Ufone’s complex and deliberately opaque accounts. CCP had earlier requested Ufone’s financials, but sources claim the data submitted was so convoluted it obstructed regulatory evaluation — raising red flags over transparency and intent.
In a recent media interaction, IT & Telecom Minister Shaza Khawaja indirectly distanced the government from Ufone’s collapse, claiming that since the company is operationally controlled by Etisalat, the Ministry bears no responsibility for its continuous losses. Yet, she also acknowledged that the government remains the owner of PTCL, and by extension, Ufone — contradicting her own assertion and underscoring the confusion and lack of oversight.
The minister was also questioned about Ufone’s chronic underperformance in contrast to rivals like Zong and Jazz, who recorded soaring profits in 2024. Her response — that the Ufone balance sheet isn’t even shared with the government — has only deepened the mystery and public frustration.
Amid mounting pressure, the CCP has intensified its probe into the merger. It has raised serious concerns over Ufone’s losses and the PTCL-funded lifeline keeping it afloat, arguing that such practices distort fair market competition and deny rightful earnings to PTCL shareholders.
To make matters worse, documents reveal that instead of addressing valid objections raised by the telecom regulator PTA, PTCL has opted for a legal standoff — challenging CCP’s notices in the Sindh High Court, further complicating the merger timeline.
PTCL initially submitted its merger application on February 29, 2024, but glaring flaws forced revisions by March 6. During subsequent hearings, rival operators like Zong voiced strong opposition, warning that the merger would cement PTCL’s dominance and create a dangerous monopoly.
Ironically, while Ufone holds a significant chunk of Pakistan’s telecom spectrum, it continues to hemorrhage money — a sharp contrast to other market players who are thriving. The situation not only calls into question Ufone’s operational strategy but also raises alarms over regulatory inaction and political apathy.
Unless urgent action is taken, Ufone’s financial rot may not only kill the merger but also drag PTCL and its shareholders deeper into a fiscal black hole.