20. NET REVENUE

Introduction

The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers. All revenue is recognized as our performance obligations are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account under ASC 606.

Most of our current contracts with customers contain a single performance obligation. For contracts where we provide multiple services, such as where we perform multiple ancillary services, each service represents its own performance obligation. The standalone selling prices are based on the contractual price for the service. Our contracts generally include standard commercial payment terms. We have no significant obligations for refunds, warranties or similar obligations and our revenue includes sales taxes collected from our customers.

Disaggregation of Revenue from Contracts with Customers

We derive revenue from seven primary sources: (1) International Termination Services, (2) Indefeasible Right of Use (IRU), (3) Cable TV and Internet Services, (4) Metro Fiber Solutions, (5) Capacity Sale Services, (6) Advertisement Services, and (7) Technology Services.

The following table represents a disaggregation of revenue for the three and six months ended June 30, 2025 and 2024:

International termination services:

This service represents the international inbound traffic terminated in Pakistan via the Company’s network to local mobile network operators such as Mobilink, Zong, Telenor and Ufone. Revenue from terminating minutes is recognized at the time the call is made over the network of the Company. There is a postpaid billing invoicing cycle for such services. Company revenue is based on per minute rate and total volume of traffic in minutes. There is a postpaid billing invoicing cycle for such services. Our customers are the local mobile network operators and other operators and not the individuals making the calls.

Indefeasible Right of Use (IRU) services:

It is a distinct performance obligation whereby the Company enters into a contractual agreement to grant Indefeasible Right of Use (IRU) of dark fiber up to 20 years or more. Revenue from IRU services is recognized at point in time, when the asset is transferred, and a customer obtains control over it.

Cable TV and internet services:

Cable television is a video delivery service provided by the Company to retail and commercial subscribers via a coaxial cable and fiber optics, whereas Internet service is the delivery of data service provided by the Company to the subscribers via a coaxial cable and fiber optics. The Company is providing Fiber to the Home (“FTTH”) services which is not a distinct performance obligation, but rather a component of connectivity services. The Company charges connection and membership fees at the time of setting up of connections. Subscription revenue from Cable TV, internet over cable, cable connectivity and channels subscription fee is recognized on provision of services.

Connection and membership fees are recognized at the time of sale of connection, which is paid by the customer at the time of the sale of the connection, and it entitles the customer to access the cable TV and internet services provided by the Company. The Company follows an advance billing invoicing cycle for such services.

Metro fiber solutions:

This revenue stream represents point to point (P2P) connectivity, the latest Dark Fiber internet technology to its high-end large scale multinational companies, IT companies and leading educational institutions in major cities of Pakistan. Dark Fiber refers to fiber optic networks with no service or traffic running on the fiber strands. Unlike managed fiber services, Dark Fiber gives the maximum level of control to businesses, allowing them to use their preferred protocol and manage and maintain their own equipment. Dark Fiber has the capability to offer near limitless capacity, as well as providing the assurance of dedicated connectivity. It can be termed as a fiber corridor offering Committed information rate (CIR), fiber and data services, making it an excellent choice for organizations who require a dedicated, high capacity, secure service. Revenue from metro fiber solutions is recognized at point in time, when the asset is transferred, and a customer obtains control over it.

Capacity sale services:

These are the services arrangements whereby the Company enters into a contractual agreement to provide a portion of the capacity of fiber, wherein the rights are given to the customers for a longer period, i.e., 20 years or more. Revenue from capacity sale services is recognized at point in time, when the asset is transferred, and a customer obtains control over it.

Advertisement services:

This revenue relates to the commercials of the different businesses, which are aired on the Company’s cable TV network. The Company offers advertisement to corporate, SME and retail customers on its in-house entertainment channels. There is vast range of advertising packages tailor-made and customized according to specific client requirements at high economical rates. Clients can opt for multiple modes of advertising like: Multiple Scroll, Multiple Logo, L-Shape, Time-checks, TVC, Documentary and Channel Branding. Advertisement income is recognized based on spots run when commercials are aired on the network. The Company follows a postpaid billing invoicing cycle for such services.

Technology services:

This revenue relates to the sale of technology services. The Company delivered a custom platform for the client. It entailed development of a hybrid solution. Features for service management that were not available in the Hyperledger® framework were developed for this purpose. To optimize operational costs, the Company manages its development and product support operations from Pakistan.

Deferred revenue was $505,212 as on June 30, 2025, and $489,107 as of December 31, 2024.