ISLAMABAD - In a bid to tap as much as $1-1.5 billion during the present fiscal year, Prime Minister Nawaz Sharif has given his final approval to the much-awaited auction of the third generation (3G) mobile spectrum licensing.
The government has issued 3G policy directives for the next generation spectrum auction and has directed Pakistan Telecom Authority (PTA) to hire a consultant for the purpose. The directive issued to PTA also asked the authority to ensure the auction in a transparent manner while taking the stakeholders on board and avoiding any kind of controversy during the process.
The service when commissioned will provide modern and fastest services to the mobile phone users in Pakistan as the country has one of the highest ratios of cellphone users in the region. The financial and technical pre-qualification and subsequent bidding process might take another three to four months to complete, officials say.
The next generation spectrum auction was awaited since long and the previous government had once started the process that owing to some allegations was stopped. Then PTA chairman was also removed in the near past. Without the appointment of chairman 3G auction could not be held because as per PTA constitution, it could not take any decision or start any bidding process in the absence of its chairman. The government has now appointed the acting chairman of the authority that has made it possible to start the process again.
The important points finalised in the policy directive issued to PTA include keeping the auction technology neutral. The ministry has directed PTA to leave it on the operator's choice while auctioning the spectrum that whether they want to use 3G or 4G equipment, they should be free to do that.
The PTA will now hire the consultant to finalise the mode of auction keeping in view the maximum financial benefit for the government. The government has set the target of around $1billion to $1.5billion to be obtained from the next generation spectrum auction.
The IT and Telecom Ministry has asked PTA to keep the whole process transparent to avoid any controversy and to ensure the auction that the government needs to be done at the earliest to earn foreign exchange which it already has mentioned in the budget. The government also has asked PTA to motivate the winner of the auction to encourage the local mobile manufacturing. It has also directed the authority to make the winner willing to promote research activities in the country and also the transfer of technology over a period of time that might be finalised by the authority.
As per the policy, Pakistan Telecom Authority will decide about the starting price of the spectrum auction. It also will be decided by the authority that whether the entire available spectrum will be given to one company or will be distributed among more than one. Presently, three blocks are available that means maximum three companies can be the winner or the authority can decide to auction the whole spectrum as one unit. Earlier, the incumbent regime could not even initiate the process of auction of 3G licence during the first quarter of current fiscal year. Former PPP-led government also failed to bring foreign investment to the country through the auction of 3G licence. Pakistani consumers have been waiting for 3G networks to get better data connections over mobile phones for years. But, no progress was made due to certain reasons including undue delay in appointment at the top slots of the PTA.
However, on finding reluctance and delaying tactics of the government towards the appointment of chairman PTA and members of the regulatory authority and also towards the auction of 3G licence, the Supreme Court on September 28, while hearing the petition seeking the completion of the 3G licence auction process and the appointment of PTA chairman and members, had directed the government to expedite the auction process.
Complying with the apex court orders to complete the quorum of regulatory authority, the government appointed Dr Syed Ismail Shah as acting chairman while Tariq Sultan as member (finance) and Law Ministry's secretary Justice (r) Muhammad Raza Khan was given the additional charge of member (compliance and enforcement). These high officials have assumed their charges.
The incumbent government also constituted a high-level committee in a bid to expedite much delayed auction process of 3G mobile spectrum licence. This advisory committee constituted by the Prime Minister Nawaz Sharif under the chairmanship of federal minister for finance was made to finalise the arrangements for auction. Besides federal minister for finance, the advisory committee includes Ms Anusha Rahman Ahmad Khan, Minister of State For Information Technology & Telecom, Akhlaq Ahmad Tarar, Secretary (IT & Telecom), Syed Ismail Shah interim chairman PTA etc. This high level committee has so far approved the policy directives with regard to the process of auction.
Well-places sources told this scribe that the premier had given his final nod to auction the 3Glicence over a summary, which was earlier sent by the Ministry of Information Technology and Telecom to the Prime Minister Office. Besides this, the summary also sought approval on certain rules and regulations necessary to materialise the long pending issue.
The sources further told that the government is likely to submit its response to the apex court on October 14 with regard to the appointment of PTA chairman and its members and the long awaited auction of 3-G licences. And, this time the PTA has been fully authorised to auction the licence that could not be made despite passing long two and half years, they added.
The incumbent PML-N government in its first annual federal budget had estimated recovery of $800million from Etisalat and $80million to $1billion revenue generation through the auction of 3G licence during the ongoing financial year 2013-14 as the PTA officials had estimated that a 3G auction could raise $1 billion or even more in annual licence fees.
Experts of telecom sector, when contacted, unanimously admired the government action to materialise the auction of 3G licence, which to them could significantly assist and help the struggling economy of the country. They said the auction of 3G licence would decrease the dependency on bank borrowing and would also help in stabilising Pakistani rupee which is under severe pressure against US dollar from last many days due to certain reasons including heavy repayments to the Internal Monetary Fund (IMF), haj season, investment in US dollars, and lesser foreign inflows etc.