Pakistan’s telecom industry has called on the government to end direct government-to-government (G2G) contracting, warning that the practice is squeezing private companies out of IT and telecom projects and discouraging investment and innovation.
The Pakistan Telecommunication Access Providers Association, which represents 26 companies including Cybernet, Nayatel, PTCL, Wateen and Multinet, has asked the government to remove the provision allowing state-owned entities (SOEs) to secure projects directly from other government bodies without competitive bidding.
Association President Dr Shahid Farooq raised the issue in a letter to Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal and IT and Telecom Minister Shaza Fatima Khawaja.
The association specifically called for the removal of Clause 42(f), introduced into the Public Procurement Rules 2004 through SRO 834(I)/2021. The provision allows government-owned organisations and SOEs to enter into direct contracts with other state entities.
According to the association, federal and provincial governments have since strengthened existing SOEs and created new state-owned entities that have secured numerous IT and telecom projects through direct G2G arrangements over the past five years.
The telecom body said this has reduced opportunities for private companies that have invested heavily in infrastructure and digital services over the past two decades.
The government is one of the largest buyers of IT, telecom and digital services in Pakistan. The association said a growing share of this market is now being captured by government-owned companies instead of local private-sector firms.
It warned that the shrinking domestic market could also hurt Pakistani companies seeking to expand internationally, as weaker local business opportunities reduce their ability to develop products, build expertise and compete for global customers.
The association also raised concerns about unequal competition between SOEs and private companies. It said state-backed entities can benefit from regulatory advantages, preferential licensing arrangements and government support that are not available to private-sector competitors.
The industry body further argued that reduced competition could weaken innovation by limiting incentives for private companies to invest in research, development and new technologies.
It also criticised the performance of state-backed entities, arguing that the absence of open competition can reduce pressure to improve efficiency and service quality.
Another concern raised by the association was subcontracting. It alleged that some SOEs awarded G2G projects subsequently outsource the work to selected private contractors without competitive bidding.
According to the association, such arrangements can bypass the transparency and competitive safeguards intended to govern public procurement.
The telecom industry has therefore urged the government to ensure that SOEs compete with private companies on equal terms whenever public funds are used for IT, telecom and digital projects.
The association said a competitive procurement system would give both public and private companies a fair opportunity while encouraging greater investment, innovation and efficiency across Pakistan’s digital economy.
