ISLAMABAD:
Pakistan’s telecommunication sector has long been a competitive and rapidly evolving industry, where consumer protection has remained critical. However, an audit report, by the Auditor General Pakistan (AGP), released this week has cast a dark shadow over the largest player in the market, Jazz, revealing how the telecom giant overcharged its subscribers by an alarming Rs6.58 billion during the fiscal year 2023-24.
This hefty sum was collected by Jazz, despite its billing practices clearly violating the tariffs approved by the Pakistan Telecommunication Authority (PTA). What’s more concerning is the lack of effective oversight by PTA, which, despite being the regulatory body, failed to prevent the overcharging, leaving millions of consumers at the mercy of an unchecked pricing system. This development raises significant questions not just about the practices of Jazz but about the functioning of Pakistan’s telecom industry as a whole.
According to the report, Jazz’s billing practices violated the Pakistan Telecommunication (Re-Organization) Act, 1996, and the Telecom Consumer Protection Regulations, 2009, which require operators to charge only the rates that have been formally approved by PTA.
“Audit observed that Jazz overcharged its customers above the rates approved by the Authority,” said a copy of the available Audit Report on the accounts of public sector organisations (Telecommunication Sector) for the Audit Year 2024-25.
A comparative analysis of selected weekly and monthly packages showed that Jazz charged higher-than-approved rates across multiple bundles, extracting a total of Rs 6.583 billion in excess payments from consumers during the year.
For instance, the operator charged Rs1,043 for its “Monthly Super Duper” package against the approved rate of Rs955, and Rs1,739 for the “Monthly Freedom” package instead of Rs1,652. In some cases, such as the “Monthly YouTube & Social Offer,” consumers were billed Rs 434 against an approved rate of Rs 348, resulting in overcharging worth over Rs 2.12 billion on that package alone.
Audit authorities have held both Jazz and PTA responsible. The report stated that the overbilling “indicated poor regulatory oversight of PTA,” as the regulator not only failed to enforce approved tariffs but also issued blanket permission allowing a quarterly price increase of up to 15 percent.
According to the audit report, the matter was reported to the management and PAO during November 2024.
Following which, it was replied that because telecom is a de-regulated industry, PTA only looks after competition and avoids predatory pricing by SMP (Significant Market Power) operators, allowing other operators to control the Average Revenue Per User (ARPU) of operators, which is already the least in the world and the region.
The PTA granted Jazz approval to increase the prices of its packages in two separate instances. The first approval was issued on February 12, 2024, and the second one on August 12, 2024.
Under these approvals, Jazz was allowed to increase the prices of its packages by up to 15% every quarter. This means that for each quarter (a three-month period), Jazz had the authority to raise its prices by a maximum of 15%. Additionally, Jazz was also allowed to reduce the incentives (benefits) offered in its packages by up to 5%. For example, this could involve reducing data limits, talk time, or other benefits that come with the package.
However, Jazz had to inform the PTA about these price increases and incentive reductions before actually implementing them. This was a requirement to ensure that the PTA was aware of and kept track of these changes.
The approval allowed Jazz to make these price adjustments during two specific periods: from February to June 2024 and from August to December 2024.
In accordance with the PTA’s approval, Jazz went ahead and raised the prices of its packages on November 12, 2024. Jazz informed the PTA about this increase, as required, in a letter issued on that same day.
PTA, in its response, also claimed that the telecom industry operates under a deregulated framework where it primarily ensures fair competition rather than strict tariff enforcement.
It further argued that operators were granted leeway to adjust prices by up to 15 percent per quarter and reduce incentives by 5 percent, subject only to intimation to the Authority. Jazz had, in fact, informed PTA of certain price hikes through a letter dated November 12, 2024.
However, the audit dismissed this justification as “untenable,” after having gone through the proposals submitted by Jazz to PTA, stressing that such blanket approvals were contrary to the spirit of consumer protection laws. “The Authority’s failure to regulate these increases has directly burdened consumers,” the report noted.
The matter was also discussed at the Departmental Accounts Committee (DAC) meeting held on December 26, 2024, where PTA was directed to furnish the complete record of tariff revisions approved for Jazz. However, the regulator failed to provide the requisite documentation by the time the report was finalised.
In its response to the report, Jazz has also shared its official version with Profit:
“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 the Pakistan Telecommunication Authority (PTA), in accordance with clearly defined processes.
We are reviewing the observations shared in the audit report on the Pakistan Telecommunication Authority (PTA) for Audit Year 2024–25. We remain confident that Jazz has acted lawfully and transparently at every step, in full alignment with PTA’s rules and regulatory procedures, including those related to tariff approvals and mandated contributions.
We trust that the matter will be reviewed in the context of regulatory facts, documented approvals, and institutional roles.”
Meanwhile, the audit has now recommended a thorough inquiry into the matter, implementation of DAC directives, and the fixation of responsibility on officials at fault for allowing the operator to impose unauthorised charges on millions of subscribers.
“Audit recommends implementation of DAC directives, besides inquiry into the matter and fixation of responsibility on the person(s) at fault,” said the audit report of AGP.
It is pertinent to mention that with over 190 million mobile subscribers nationwide, the telecom sector is one of the most revenue-generating industries in Pakistan. Meanwhile, Jazz commands close to 40% of Pakistan’s mobile subscriber market, serving more than 73 million users nationwide, making it the country’s largest telecom operator by a considerable margin. Its market dominance has been further reinforced by Telenor’s recent exit, which reduces meaningful competition in the sector and leaves the industry concentrated among just a few major players.
In such a low-competition environment, operators like Jazz can exert significant influence over pricing, service offerings, and revenue streams, creating conditions where consumer exploitation—such as the Rs6.58 billion overcharging uncovered in the audit—becomes possible.
The audit highlights how regulatory lapses, combined with a deregulated pricing framework and a lack of competitive pressure, can allow a dominant operator to bypass safeguards designed to protect millions of subscribers. While Jazz continues to consolidate its position as a market leader, this incident underscores the urgent need for PTA and policymakers to strengthen oversight mechanisms, enforce tariff compliance, and ensure that dominance in a critical sector does not translate into unchecked power at the expense of public interest.
These revelations have highlighted not just the unchecked profiteering by private operators but also the PTA’s failure to act as an effective guardian of consumer rights as the findings of AGP have underscored mounting concerns over regulatory lapses in Pakistan’s telecom sector, where consumers remain vulnerable to unilateral price hikes despite legal safeguards.
