The Auditor-General of Pakistan’s office is mandated by legislation and the constitution to audit government expenditure and to file an annual report with Parliament. The reason behind this is simple – the taxpayer pays for government or public expenditure, and it should be spent wisely and in accordance with the law. And since government departments and ministries the world over had a habit of not doing that, this needs to be checked by an independent third party that is not answerable to any of these ministries, departments or the organisations under their control.
And that is where the Auditor-General of Pakistan (AGP) comes in. It is a post which is the equivalent of that of a federal secretary, which means it’s the equivalent of the bureaucratic head of a ministry.
The most recent report is for Fiscal 2024-25 and has been submitted to Parliament. It is available to the public online – so far, because given the revelations about misuse of government authority and funds that it has revealed, it may well be taken offline at any time.
I went through it in detail and found some startling disclosures – and these certainly need to be taken by and examined in more detail by Parliament.
The first example related to the Pakistan Telecommunication Authority (PTA), the state-run telecom regulator under whose jurisdiction come not only mobile phone companies but also internet service providers.
As part of its examination of the conduct of the PTA, the AGP report also gave an example of a leading mobile services provider and how the PTA failed in its responsibilities of protecting the interests of consumers.
The example is given in detail below, and all figures are from the AGP’s report. It is illuminating in least because it shows how the state-run regulator gave blanket approval to the mobile phone company to raise its tariff every quarter, without asking for and giving justifications for each increase.
The audit report said that this overcharging by Jazz of its customers, making them pay a tariff over and above that approved by the PTA, amounted to poor regulatory oversight
Jazz overcharged its customers by Rs 6.583 billion in FY 2023-24.
The audit by the office of the AGP found that Jazz overcharged its customers on various mobile phone packages and that in Fiscal 2023-24, this amounted to Rs 6.583 billion.
The audit report said that according to Section 4(1)(m) of the Pakistan Telecommunication (Re-Organisation) Act, 1996 (Amended up to 2014), the PTA is supposed to regulate competition in the telecom sector and protect consumer rights but it failed to do that.
The PTA approved tariffs of various packages of mobile telecom services submitted by Jazz during FY 2023-24. The audit found that Jazz overcharged its customers over and above the rates approved by the Authority.
A comparative analysis of selected weekly and monthly packages revealed that the operator overcharged consumers by an amount of Rs 6,583,690,860 during FY 2023-24.
The audit gave several examples where the tariff that Jazz charged its customers was higher than that approved by the PTA:
- For the Monthly Super Duper Package, the approved tariff was Rs 955, but on the Jazz website, the tariff was Rs 1,043 – over the course of the period that this higher-than-approved charge was displayed on the website, Jazz overcharged its customers Rs 722.051 million.
- For the Monthly YouTube and Social offer, the approved tariff was Rs 348, but consumers were charged Rs 434 as mentioned on the Jazz website. Over the course of the period that this higher-than-approved tariff was used to bill customers, Jazz overcharged them by Rs 2.126 billion.
The audit report said that this overcharging by Jazz of its customers, making them pay a tariff over and above that approved by the PTA, amounted to poor regulatory oversight.
The PTA replied to the audit report's observations by saying that it had granted Jazz approval to raise the tariffs of its packages by a maximum of 15% per quarter. In response, the audit report said that this "blanket approval" was against the spirit of Consumer Protection Regulations.
The audit report said that an inquiry should be conducted to fix responsibility on the "person(s) at fault".
It should be noted that for the year ending 31 December 2023, Jazz made an after-tax profit of Rs 12.682 billion.
The most basic of questions that needs to be asked of the state telecom regulator is how it allowed a blanket approval to a mobile services provider to raise its tariffs charged from consumers by as much as 15% every 90 days.
How can that possibly be justified, keeping in mind that one primary duty of the state regulator is to look out for the interests and rights of telecom users?
Why couldn’t the regulator require that the mobile services provider apply for every tariff increase separately, so that each request would be examined on its merits? Allowing it to have a blanket approval would clearly suggest that the regulator is shirking from its primary responsibility and being lazy.
And the irony is that Jazz has been run for the past many years by someone who is praised and lionised in the media as a great CEO and business leader and captain of industry. Parliament needs to ask him questions on this issue as well. And also explore the possibility that such practices may well be the norm in this industry.