Zong claims compensation from PTA over spectrum interference

Zong claims compensation from PTA over spectrum interference

Pakistan’s Zong is reportedly seeking PKR610 billion (US$3.8 billion) in damages from the country’s regulator, the Pakistan Telecommunication Authority (PTA).

Local news outlet ProPakistani cited anonymous but “reliable” sources as saying that the China Mobile-owned telco has filed a compensation claim against the investments and losses it has experienced as a result of ongoing issues with spectrum interference. Zong claims that this has caused customers to churn from its network, resulting in revenue loss.

In a bid to address the situation Zong has invested heavily in signal boosting solutions for its infrastructure, and the operator argues that this has put it on the back foot in terms of competition. Zong notes that the PTA and Frequency Allocation Board (FAB) are the bodies responsible for preventing spectrum interference, and accuses them of failing at this duty.

The claim is considered Zong’s counter to a ruling earlier this month which argued that the operator had been using 2×6.6MHz of 1800MHz spectrum since October 2019 without authorisation. With its conduct ruled illegal, Zong was given seven days to free up the spectrum and hand over the unpaid licence fees for its usage period. As reported by CommsUpdate, the fee was calculated at US$29.5 million per MHz per year for 15 years.

Zong first reported interference on its 900MHz spectrum in 2007 in the border regions of Punjab and Sindh. The issue identified cross-border signals from Indian CDMA networks, and as a solution Zong was allocated a spectrum holding in the 1800MHz band for these regions.

While the regulator allowed this concession to be renewed a number of times, the allocated frequencies were altered in 2016 and the renewal was adjusted so that it would expire alongside Zong’s 2G licence in October 2019. As part of the updated renewal terms, Zong was to be offered a new allocation in the 900MHz range that was not affected by the border interference.

However, Zong continued to use its original 1800MHz holding after the licence had expired, prompting the PTA to issue a show cause notice (SCN). Zong’s argument was that it would be “unjust” to strip it of this holding as the replacement airwaves did not adequately compensate it for the losses it had endured as a result of the interference.

Noting that it is the PTA’s role to “promote fair competition in the market”, Zong argued: “The SCN and the directions contained therein have placed [Zong] at a disadvantage and is aimed at distorting the market equilibrium. Therefore the SCN is merely a colourful exercise of Authority aimed at giving advantage to other telecom operators without addressing the root cause i.e. interference in the spectrum allocated.”

To bolster its case, Zong noted that the PTA’s replacement 900MHz allocation continues to experience significant cross-border interference, meaning that the regulator’s promise of an improved spectrum holding was “purely hypothetical.” The PTA countered that Zong had rejected other options for renewing its licence, noting that all of its actions were both legal and in accordance with all agreements made with Zong.

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