The government has finalised the policy guidelines for auction of the “next generation technology spectrum”, signifying its departure from 3G range while offering a technology neutral band to investors. Headed by Finance Minister Ishaq Dar, an Advisory Committee on Auction of telecom spectrum discussed at length the recommendations submitted by the Ministry of Information Technology regarding policy directives to introduce next generation mobile services in Pakistan. The Express Tribune reported.
After due consideration, the committee finalised the recommendations for approval of the Prime Minister Nawaz Sharif, said Minister of State for Information Technology Anusha Rahman Ahmad, after the advisory committee meeting.
It was the first meeting of the advisory committee for the auction of next generation telecom spectrums, marking the beginning of a process that had remained controversial in the past. The previous Pakistan Peoples Party (PPP) government too had approved a policy directive, and even issued an information memorandum and auction calendar, but the process became controversial.
The Pakistan Muslim League – Nawaz (PML-N) government had included Rs120 billion as non-tax revenue income on the account of auction of 3G licences in the Federal Budget 2013-14 and wants to complete the process before the close of the current financial year on June 30, 2014.
In a significant policy shift, the new government decided to keep the spectrum technology neutral and has named it “next generation technology spectrum”, which offers a range of opportunities to the investors who could provide 3G, 4G or Linear Technology.
The telecom companies had complained about auctioning only 3G spectrum in the past, while arguing that the world has now moved to 4G. However, the counter argument was that the country could fetch more revenues by gradually moving from 3G to 4G spectrum. This was also one of the reasons that made the previous auction bid unsuccessful.
The policy guidelines encourage infrastructure sharing among the players. It was not immediately clear how many licences will be offered for auction. The previous government had offered three licences, where a single player was allowed to buy a maximum of two licences.
The Pakistan Telecommunication Authority (PTA) is expected to lead the auction process. The government has recently appointed Ismail Shah as the chairman of PTA.
Minister of State for Information Technology Rahman said that the government had made efforts to open the (spectrum) auction for both the existing companies and new entrants in the telecom industry. Out of five, four telecom operators were interested in the auction.
In 2007, the Musharraf government had added a clause in the sale agreement of Pakistan Telecommunication Company (PTCL) that barred the country from issuing any spectrum for the next six years. The embargo had expired in March this year.
Rahman said that the issue of determining the base price, preparing the auction plan and the information memorandum were left to international consultants who will be hired to keep the process transparent.
She said the consultants will have the liberty to review the advisory committee-approved policy directives.