Pakistan’s Telecom Operators Association (TOA) has asked the government to end direct Government-to-Government (G2G) contracting under the Public Procurement Rules, 2004, saying the practice gives state-linked entities an unfair advantage over private companies.

The association represents major telecom operators including Jazz, Telenor, Ufone and Zong, along with other stakeholders in the country’s telecom industry.

In a letter to the government, TOA said awarding contracts directly to government departments or state-owned enterprises (SOEs) without open competition can restrict private-sector opportunities, discourage investment and slow innovation.

Local Tech Companies Losing Opportunities

TOA said Pakistan’s technology and digital companies need access to the local market to launch, test and improve their products before expanding internationally.

The association argued that when government projects are handed directly to state-linked entities, private Pakistani companies lose valuable opportunities to develop their businesses and build a track record.

It warned that limited access to domestic projects could also make it harder for local technology firms to compete for international customers.

State Firms Have an Advantage

The telecom association also questioned the level playing field between private companies and state-backed entities.

According to TOA, some state-linked organizations can benefit from regulatory concessions, preferential treatment, licensing advantages or implicit government backing that private companies do not enjoy.

The association said such advantages make it difficult for private businesses to compete for publicly funded projects on equal terms.

Fewer Competitors Could Hurt Innovation

TOA further warned that greater state involvement in commercial markets could reduce innovation.

It said private companies are less likely to invest heavily in research, development and new products when they face significant barriers to accessing government-funded business.

The association also argued that government bodies acting as both regulators and major market participants can make it harder for new private companies to enter certain sectors.

Efficiency Concerns

The association linked limited competition with weaker efficiency, saying businesses operating in competitive markets face greater pressure to cut costs, improve services and respond to customers.

It cited entities including Pakistan International Airlines (PIA), Pakistan Steel Mills and power distribution companies as examples of state-owned organizations that have placed a financial burden on the national economy.

TOA argued that protecting state-backed entities from competition could create similar problems in other commercial sectors.

Jobs and SMEs at Risk

The association also highlighted the potential impact on employment.

TOA said small and medium-sized enterprises (SMEs) are an important source of jobs, particularly for young and educated Pakistanis. It argued that restricting their access to government business could limit their ability to grow and hire more workers.

Private Sector Faces Financing Pressure

TOA also raised concerns about government borrowing.

It argued that when the government borrows heavily from domestic banks to finance spending and projects, banks may prefer government securities because they are considered less risky than lending to private businesses.

According to the association, this can increase financing costs and make it harder for SMEs to secure affordable credit.

SOE Subcontracting Questioned

The association also objected to the practice of subcontracting G2G projects after they have been awarded.

TOA claimed that some SOEs may subsequently outsource portions of projects to selected private companies without conducting an open and transparent bidding process.

It said this could undermine the purpose of competitive procurement and raise questions about transparency in the use of public money.

TOA Points to PM’s Earlier Statement

The association also referred to Prime Minister Shehbaz Sharif’s previously stated view that there is “no business of government in running a business.”

TOA argued that many SOEs were created with public resources and taxpayer money, while private companies also contribute to the economy through taxes, investment and employment.

The association said giving state-owned entities direct access to government contracts can therefore create an additional competitive advantage over the private sector.

TOA has called for changes to the procurement framework so that government contracts are awarded through a more open, transparent and competitive process.

The association believes greater competition would give Pakistani technology companies more room to grow, create jobs and develop products capable of competing in international markets.