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ISLAMABAD: China Mobile Pakistan’s prolonged unauthorized use of additional radio spectrum after expiry of its 2G license has cost the exchequer Rs18 billion.
The audit report revealed that M/s China Mobile Pakistan Ltd, operating as Zong, continued using temporary additional compensatory spectrum after the expiry of its 2G GSM license in October 2019. The spectrum, originally allocated in 2007 to address cross-border interference from Indian CDMA networks, was meant only for border areas in Punjab and Sindh. However, audit findings show that Zong extended its use nationwide, deploying the additional spectrum for LTE (4G) services since 2014, in violation of its license conditions.
The Frequency Allocation Board (FAB) had initially granted the spectrum temporarily, with extensions allowed until 2019. Following the license expiry, monitoring reports from September 2024 confirmed that Zong continued to operate illegally on the additional spectrum. The Pakistan Telecommunication Authority (PTA) issued an enforcement order in December 2020, directing the operator to vacate the frequencies and pay charges based on a government policy directive of May 2019, which set the rate at $29.5 million per MHz.
According to the audit, the illegal use of 6.6 MHz of spectrum from October 2019 to October 2024 translated into a recoverable amount of Rs18.04 billion, calculated at the exchange rate of Rs278 per US dollar. Despite clear directives, FAB did not enforce spectrum vacation, nor did PTA recover the charges. The Islamabad High Court dismissed Zong’s petitions in August 2024, further strengthening the regulators’ position. However, the operator challenged the decision in the Supreme Court, signing a new license with PTA in October 2024 under court orders.
The case reflects broader issues in Pakistan’s telecom regulatory framework, where operators have historically resisted spectrum pricing and compliance measures. In previous spectrum auctions, including the 2014 and 2016 3G/4G auctions, disputes over pricing and rollout obligations delayed proceedings, highlighting ongoing tensions between revenue goals and industry demands.
During a Departmental Accounts Committee (DAC) meeting on December 27, 2024, the FAB management was instructed to pursue the case vigorously in court and keep the audit updated. However, no significant progress was shared by the time of report finalization. The audit recommended the strict implementation of DAC directives and the recovery of dues to safeguard the national exchequer.
Telecom spectrum remains a vital revenue source for the government, with auctions in recent years generating billions of rupees. The Zong case, however, underscores the challenges of enforcement when powerful operators contest regulatory actions in court. Experts note that delays in recovering dues not only weaken governance but also create unfair advantages for non-compliant players over competitors who operate within the law.
With the matter pending in the Supreme Court, the financial impact of Zong’s unauthorized spectrum use continues to raise concerns about regulatory oversight and transparency in Pakistan’s telecom sector. The outcome will set a precedent for future enforcement actions, particularly as demand for high-speed mobile data services grows and spectrum scarcity intensifies.
Audit authorities emphasized that recovering the Rs18 billion remains crucial to upholding policy credibility and ensuring fair spectrum utilization. As spectrum auctions remain central to Pakistan’s digital economy plans, the case highlights the pressing need for stricter compliance and timely enforcement in the sector.
