ISLAMABAD by SPECIAL COORESPONDENT
An audit report has uncovered that CMPak (Zong), a subsidiary of China Mobile Pakistan, continued to use additional spectrum illegally after the expiration of its 2G (GSM) license in October 2019, causing a financial impact of Rs. 53.547 billion on the national exchequer.
According to the report, the Frequency Allocation Board (FAB), under the Cabinet Division in Islamabad, had originally allocated this temporary additional frequency spectrum during its 30th board meeting on September 8, 2007. The allocation was aimed at countering cross-border interference from Indian CDMA networks in Sindh’s border regions and certain parts of Punjab. Initially granted for one year, the allocation was extended multiple times, with the last extension ending in October 2019, in line with FAB’s decision during its 42nd board meeting held on February 9, 2016.
Despite the expiration of the license, Zong continued using the spectrum illegally, as confirmed by FAB’s monitoring reports from September 2024. Furthermore, the company was found to have violated its 2G license terms by using the additional frequency for LTE (4G) services since 2014, extending the usage beyond the designated areas in Punjab and Sindh.
In December 2020, the Pakistan Telecommunication Authority (PTA) issued an enforcement order directing Zong to vacate the spectrum and pay fees based on a May 2019 policy directive, which set the rate at $29.5 million per MHz. As a result, Zong was liable to pay Rs. 18.04 billion for the spectrum usage from October 2019 to October 2024.
However, despite the Islamabad High Court dismissing Zong’s legal petition on August 21, 2024 — and imposing legal costs — neither FAB cancelled the spectrum usage nor did PTA recover the dues. The audit described the ongoing use of spectrum post-license expiry as a regulatory violation causing significant financial loss.
Zong, in its media statement, defended its actions by citing long-standing cross-border interference from Indian CDMA signals, which they claimed degraded the performance of their 900 MHz network in border areas. To ensure uninterrupted service, Zong said, FAB had granted them temporary spectrum which was periodically extended. They also stated that the dispute stemmed from complex technical and legacy interference issues.
The company has challenged the Islamabad High Court’s ruling in the Supreme Court of Pakistan and signed a PTA license on October 4, 2024, in compliance with SCP’s interim orders. However, mutual negotiations failed to reach a resolution. FAB argued that vacating the spectrum amidst “status quo” judicial orders could be construed as contempt of court.
While the administration acknowledged the audit’s objection, the operator has not yet made any payments. The Departmental Accounts Committee (DAC), in its meeting on December 27, 2024, instructed FAB to pursue the legal case vigorously and share updates with the audit team. As of the finalization of the report, no significant progress was reported.
This is not the first time this issue has been flagged. Similar irregularities were documented in audit reports for FY 2015-16, 2017-18, and 2019-20 under paragraphs 2.4.1 and 2.5.3. The recurrence of this anomaly has raised serious regulatory and financial concerns.
The PTA has stated that recovery of charges and future enforcement actions will proceed in accordance with the Supreme Court’s final verdict.
