ISLAMABAD: The government on Thursday made it absolutely clear that it would not allow the Special Communication Organisation (SCO) to operate throughout the country on a commercial basis.

“The amendments proposed by the SCO to enhance operations throughout Pakistan were principally disagreed by Ministry of Information Technology being against the stated policy of the government, international commitments and other commercial agreements in the telecom regime,” the ministry’s member telecom Mudassar Hussain told the Senate subcommittee on Delegated Legislation.

The subcommittee was formed to consider the proposed amendments to the Telecommunications Reorganisation Act 1996, allowing the SCO to enhance its areas of operations throughout Pakistan.

The subcommittee had asked the ministry and the SCO to settle the matter and prepare a report. However, the two sides could not come to an agreement during the last six months. The subcommittee, which has been hesitant to decline the SCO’s offer, gave one last chance for both the sides to work out a suitable solution.

Headed by a serving military officer, the SCO is a public sector organisation working under the ministry of IT. It was established in 1976 to develop, operate and maintain telecom services in Azad Jammu Kashmir and Gilgit-Baltistan.

For two years, the SCO has been demanding a complete autonomy to operate as a commercial entity and expand its services across the country.

However, the IT ministry feared that the results of a complete autonomy can leave an adverse impact on the growth of economy in general and the telecom sector in particular, risking millions of dollars as direct foreign investments by cellular companies.

The SCO has proposed a free of cost licence to operate and compete against other telecom operators such as Mobilink, Telenor and Zong throughout the country. It also proposed an amendment to the law for tax exemption on its income, assets, turnover and sales and customs duties on its imports and exports. Above all, the SCO requested to be funded by the federal government.

“Without these initiatives, the SCO will continue to lose business against other operators,” said Director Marketing SCO retired Brig Iftikharul Wahab. He maintained that a complete autonomy would enable the SCO to break away from government red tape process that hindered its operations.

However, the ministry informed the committee that the proposed amendments were discussed with the cellular mobile industry which warned that any amendment to the Act to favour the SCO would be challenged in courts. The committee was informed that an amendment to the law was the prerogative of the government.

“Creating another wholly government-owned telecom player in the country ran counter to the government’s deregulation policy of 2003 and the objectives of the Telecom Act. It will be counter to the revolutionary mobile and broadband telephony regime,” said the member telecom, who did not see any reason to amend the act.

The committee was informed that the government had failed to understand why the SCO sought a complete autonomy, especially when the ministry dedicated 80pc of its financial budget to the SCO for smooth operations.

Senator Kalsoom Parveen also did not agree with a complete autonomy for the SCO, which she said would hurt a fair and transparent telecom market.

Published in Dawn, August 18th, 2017