Government lost Rs. 2 Billion over PTA’s concession for DV Com

Pakistan Telecommunication Authority (PTA) filed a claim of Rs. 1.6 billion against a telecom company, DV Com in Islamabad High Court (IHC) on Monday. The claim was made on account of delay in payment of the frequency spectrum licence fee which the telecom company purchased almost a decade ago. Although DV Com paid the fee amount earlier this year, they have still not paid two percent late payment charges. Even with the original payments, Government of Pakistan will take a loss of Rs. 2 Billion since the current value of these licences and frequency spectrum are up to Rs. 6 Billion.

DV Com, owned by stock market broker Aqeel Karim Dhedhi, purchased the Wireless Local Loop (WLL) licence from the PTA almost a decade ago but failed to make full payment until this year. The company has already sold the frequency spectrum licence to another telecom company at, most probably, current price valuation.

The incident raised concerns about a common strategy followed in Pakistan to avoid heavy payouts. A bidder in an auction does not pay for frequencies, then drag the matter in courts for years until the frequencies increase in value. They make the payment under old price whereas the current value of price is much higher than before. DV Com may have made Rs. 2 Billion in profit when it sold the frequency spectrum licence to another company this year.

On the other hand, it came to light that PTA cancelled the frequencies after the company failed to make the full payment but later reversed the decision giving more time to DV Com. If the decision would not have been reversed, the said frequencies would have been auctioned to the highest bidder thus gaining maximum revenue for the government.

The court has adjourned the case till June 26, 2015, when the counsel for the telecom company will present his arguments.