Difference of opinion among the policy makers over auctioning of 3G licenses

ISLAMABAD (PAKISTAN)

There seems to be a difference of opinion among the policy makers over auctioning of 3G licenses in Pakistan that is scheduled to be conducted on March 29th.

Senate’s Standing Committee on Information and Technology met on Tuesday discussing various aspects of upcoming 3G licensing and possible revenue that Government of Pakistan would earn.

The committee criticized PTA for using the term 3G/4G/ LTE and technology neutral licensing for the upcoming auction of spectrum in Pakistan and asked the PTA Chairman as to why he is favoring PTCL in his personal capacity. The chairman of the committee, Senator Muhammad Idrees Khan commented that it seems the whole process of auctioning spectrum is designed for one single organization in mind.

Senator Pervaiz Rashid pointed out that only terms 3G should have been used. When asked the Member of Ministry of Information Technology, Ismail Shah responded that Ministry had recommended to use the word 3G but it was PTA only which introduced the terms 4G and LTE later in the draft.

While clarifying his position, Chairman PTA, Dr. Muhammad Yaseen told committee that we are offering spectrum and not the 3G and by international standards it is always a neutral license and not something specific to 3G, 4G or LTE. When Pakistan auctioned 2G license back in 2004, they were also of neutral technology and the similar method is being applied now.

Committee realized that the licensing should bring the maximum earnings for the Government of Pakistan, therefore, it asked the PTA to increase the base price of license from US $ 210mn to US $ 291mn that is equal to the earlier collected price for 2G licenses back in 2004.

Committee further criticized the privatization of PTCL and asked PTA why it has been unable to collect the outstanding installment of US $ 800mn from PTCL.

Chairman PTA while commenting on the issue said, it was only PTCL and the agreement between its management and Government of Pakistan that became the cause of delayed 3G licensing in Pakistan otherwise, by books, the scheduled year for 3G licensing was 2006.

Details reveal that the committee had the anti-PTCL agenda in mind as it stopped PTA to cater any request from any investor who is already a defaulter. From the tone of committee, it looks, unless PTCL pay the outstanding US $ 800mn, it cannot participate in the bidding process for its subsidiary Ufone for which it confidently announced to get the 3G license few days ago.

It should be recalled here that PML (N) as represented by Senator Prevaiz Rashid, does not want the entire licensing to be conducted in the tenure of PPP as this will always give PPP a credit for introducing 3G in Pakistan just like Mian Nawaz Sharif takes credit of Motorway everywhere he goes. It seems, he personally wants to split the process into two so the later part could be auctioned in his tenure, if he gets into power.

Committee’s Directions

Remove the terms 4G/LTE and technology neutral from licensing draft as 4G/LTE

4G/LTE will be licensed later for earning more money

Increase the base price from US $ 210mn to US $ 291

No defaulter will be able to participate in the bidding

50% of the licensing amount will be paid in 30 days and rest will divided in 5 equal installments in local currency

In the end, Chairman PTA confirmed that the draft would be changed according to the committee’s recommendations. It should be recalled here that earlier PTA expressed satisfaction on its latest achievements.

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