Pakistan Telecom Association Pushes Against G2G Direct Contracting Amendment

In a bold move that may reshape the landscape of procurement in Pakistan's telecom sector, the Pakistan Telecommunication Access Providers Association (PTAPA) is urging the repeal of a controversial 2021 amendment to the Public Procurement Rules. The amendment permits government-to-government (G2G) direct contracting, a practice the association argues obstructs fair competition and innovation within the industry. This amendment serves as a critical junction for the role of private sector entities, particularly IT and telecom companies, forcing stakeholders to argue for more inclusive procurement practices.

Historically, as noted by the PTAPA President, Dr. Shahid Farooq, this amendment has resulted in an environment where state-owned enterprises (SOEs) have received preferential treatment in procurement, receiving numerous contracts without the need for competitive bidding. By allowing state entities to contract directly, the government has inadvertently crowded out private firms that have spent years building infrastructure and providing services. The PTAPA emphasizes the need for transparency in contracting processes and advocates for equal competitive opportunities for all parties involved.

The amendment, enacted via SRO 834(I)/2021, has led to an influx of contracts awarded to government-backed organizations, significantly shifting the dynamics of competition in the telecom sector. The association's letter to key ministers — including Finance Minister Muhammad Aurangzeb and IT and Telecom Minister Shaza Fatima Khawaja — highlights that the proliferation of SOEs has created a monopoly-like environment. Given that the federal government is one of the largest buyers of IT and telecom services, the lack of competitive pressure on SOEs often results in underperformance, which ultimately stifles innovation.

The implications of this situation are dire for the future of Pakistan’s private sector. As the PTAPA pointed out, the dominance of state entities not only suppresses competition but also dampens local innovation. When state-related firms face zero competition, the incentive to improve services or innovate diminishes, ultimately leading to failures in the long run — as illustrated by examples like Pakistan International Airlines and various Discos. The cycle of reliance on and support for SOEs feeds into an ineffective system that keeps out potentially more effective private sector solutions.

Moving forward, the Telecommunication Access Providers Association plans to harness the voices of its 26 member organizations, which include companies such as Cybernet, nayatel, PTCL, Wateen, and Multinet. The association’s intent is to push government representatives towards reconsidering the G2G directive within the public procurement framework, highlighting the need for reforms that both encourage investment from private firms and allow for healthy market competition.

Addressing these concerns, procurement professionals should stay vigilant for potential policy changes that align with PTAPA’s vision. Renewed emphasis on competitive bidding could yield more lucrative opportunities for private sector vendors as the government weighs the merits of revising its contracting standards. Engagement with policymakers will be essential as stakeholders examine pathways to reform practices that currently favor SOEs over private businesses. While the voices advocating for change are growing louder, the real challenge will be how effectively these arguments can translate into actionable policy revisions in procurement that accord fair treatment and equal opportunity to all market participants.

• The Pakistan Telecommunication Access Providers Association is calling to repeal G2G direct contracting rules.
• Encouraging competition, the change could enhance opportunities for private sector vendors in telecom.
• G2G rules limit transparency and fair bidding, hindering growth in the industry.
• Increased competition could drive innovation and improvements in services offered.
• The federal government is a major purchaser of IT and telecom services and its policies directly impact procurement dynamics.
• Industry leaders urge policymakers to consider the negative impacts of SOE dominance on the private sector.