PTA-LDI companies dispute threatens closure of nearly 40 per cent ATMs

ISLAMABAD: The ongoing conflict between Long Distance & International (LDI) operators and the Pakistan Telecommunication Authority (PTA) over the application of allegedly inflated Access Promotion Contribution (APC) rates is posing a significant threat to Pakistan’s telecom sector and overall economy.

The issue concerns APC dues charged between 2008 and 2010, which LDI operators claim were calculated using incorrect methods, leading to overcharging, Dawn News reported on Monday.

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The dispute reignited recently after PTA declined to renew the licences of seven LDI operators unless they cleared their unpaid APC dues. Out of the 21 LDI licence holders, 13 operators are entangled in the dispute, while only four have cleared their dues and received licence renewals. The remaining nine operators are said to owe a staggering Rs78.6 billion, including Rs 24.1 billion in principal and Rs 54.5 billion in late fees.

These operators, who control around 90 per cent of the market, are currently operating under court orders after PTA refused to renew their licences due to the unpaid dues. The APC system, introduced in 2006, requires LDI operators to contribute a portion of their revenue to the Universal Service Fund (USF), aimed at expanding telecom infrastructure in underserved areas.

However, LDI operators argue that PTA wrongly applied APC rates meant for local loop operators, leading to inflated charges.

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An LDI representative highlighted that PTA adhered to correct calculations until 2007 but altered the method in 2008. The dispute ended in 2011 when PTA reverted to the original rules, but operators claim that the damage had been done, with legal inconsistencies causing grey traffic and financial burdens on the sector.

Legal battles over the issue continue, with courts ruling in favour of the operators and ordering PTA to recalculate APC payments. Operators maintain that they have already overpaid by around Rs 8 billion and have Rs 6 billion in escrow accounts awaiting the court’s decision.

Despite this, PTA persists in demanding the unpaid dues, leading to a deadlock. The Ministry of Information Technology and Telecommunication (MoIT&T) briefly proposed a payment plan that would allow operators to settle half the principal amount in instalments, but PTA objected, insisting on full payment.

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Industry insiders warn that if the LDI operators’ licences are not renewed, the consequences could be severe. Half of mobile traffic, 10 per cent of internet traffic, and 40 per cent of ATM machines could be affected, alongside significant disruptions to international and cross-border communications.

LDI operators stress that they are not seeking any concessions but are asking for lawful treatment and a resolution based on accurate APC calculations. The failure to settle this issue could have far-reaching implications for Pakistan’s telecom infrastructure and economy, risking thousands of jobs in the sector.