ISLAMABAD:

The Auditor General of Pakistan (AGP) has unearthed Rs6.58 billion in alleged overcharging by telecom operator Jazz from its customers and recommended a formal inquiry to determine responsibility. The audit has also urged implementation of Departmental Accounts Committee (DAC) directives and fixation of responsibility on those at fault.

Auditors revealed that the company had pocketed billions from consumers through various mobile packages beyond the tariff rates approved by the Pakistan Telecommunication Authority (PTA). According to Section 4(1)(m) of the Pakistan Telecommunication (Re-Organisation) Act, 1996 (amended up to 2014), the PTA is responsible for regulating competition in the sector and protecting consumer rights. Similarly, Regulation 10(1)(i) of the Telecom Consumer Protection Regulations, 2009, binds operators to ensure that no tariff is charged or advertisement launched without PTA approval, wherever required.

The PTA had approved tariffs for multiple Jazz packages during FY2023-24. However, the audit observed that the operator overcharged its customers beyond the approved rates. A comparative analysis of selected weekly and monthly packages confirmed that Jazz overcharged an amount of Rs6.58 billion during the financial year.

The audit concluded that charging customers above approved rates reflected weak regulatory oversight on the part of PTA. The matter was reported to the management and Principal Accounting Officer (PAO) in November 2024. In response, PTA argued that as a deregulated industry, it monitors competition and prevents predatory pricing by the Significant Market Power (SMP) operator, while leaving other operators to manage the Average Revenue Per User (ARPU). PTA maintained that ARPU in Pakistan is already among the lowest in the world.

The telecom regulator, through letters dated February 12, 2024, and August 12, 2024, granted approvals to Jazz for increasing package prices by up to 15% per quarter and decreasing incentives in any bundle by up to 5%, subject to prior intimation. These blanket permissions covered February-June 2024 and August-December 2024, respectively. Subsequently, Jazz increased its package rates through a letter dated November 12, 2024, under intimation to PTA.

The auditors, however, rejected the explanation as untenable, noting that granting blanket approvals for tariff hikes went against the spirit of the Consumer Protection Regulations. Audit officials retrieved information from various proposals submitted by Jazz to PTA during FY2023-24 and approvals granted by the Authority, which suggested excessive consumer burden beyond permissible limits.

The matter was later discussed in a DAC meeting held on December 26, 2024. The DAC directed PTA to provide a complete record of approved rate increases for various mobile packages to audit authorities for verification. However, PTA had not furnished the requisite record until the finalisation of the report.

The Competition Commission of Pakistan’s website states that the Commission implements the Competition Act 2010, which prohibits “the abuse of dominant position by one or more undertakings.” Section 3(i) specifically addresses “Exploitative abuses” that result in direct loss of consumer welfare, including “charging excessive prices.” However, a CCP spokesperson clarified that the issue did not fall within the Commission’s jurisdiction.

Meanwhile, Jazz strongly rejected the audit’s findings. A company spokesperson stated, “Jazz is a responsible corporate entity and has consistently operated in full compliance with Pakistan’s regulatory framework. All tariffs and services are launched only after formal approvals by PTA, in accordance with clearly defined processes.”

The spokesperson added that Jazz was reviewing the audit report’s observations regarding PTA for Audit Year 2024-25 and expressed confidence that the company had acted lawfully and transparently. “We remain confident that Jazz has acted in full alignment with PTA’s rules and regulatory procedures, including those related to tariff approvals and mandated contributions. We trust the matter will be reviewed in the context of regulatory facts, documented approvals, and institutional roles,” the statement said.

A formal comment from PTA was still awaited at the time this story was filed.