Attractive tariff plans to lure customers for 3G and 4G

ISLAMABAD ( MEDIA )

 Cellular companies said  they are finalising attractive tariff plans to lure customers for 3G and 4G connections, in the face of lower predicted penetration of this much-awaited technology in Pakistan.

“Yes, we are finalizing our roll out plans in the aftermath of 3G and 4G auction,” industry sources confirmed to The News.

“It will be expensive service at the initial stage but with growing competition the tariff will come down over the medium term.”

To avail this new technology, thousands of customers might have to change their SIMs in order to ensure compatibility of this latest technology on their phones.

“There will be no need to get new connections but in a few thousand cases the customers might require new SIMs,” they added.

They said that some cellular companies have tested limited service of 3G in their own jurisdiction and found that the network up-gradation enabled them to run data communication on a much accelerated pace.

The tariff plans, they said, would be determined on the basis of actual bid price and infrastructure cost incurred to upgrade the network.

Different tariff plans for different segments of the society would be determined and then an average tariff would be worked out.

“In case of one cellular company, the up-gradation of network is going to cost around $1 billion,” said the official of one cellular company working in Pakistan.

The penetration of 3G and ultimately 4G services will also help in determining the tariff plans, he said, adding that the penetration in neighboring India stood at 10 percent after a few years after the passage of the auction of 3G technology.

“The pace of penetration into Pakistani market will be slower in the initial stage,” he said and added that the government determined the base price of 3G technology on the basis of final price of last auction through which Telenor entered into our market.

The base price stood at $295 for 10MHz paired spectrum in 1.9/2.1GHz frequency band, $ 210 million for 10MHz paired spectrum in 1800 MHz frequency band and $ 291 million for 7.38MHz paired spectrum in 850MHz frequency band.

The inclusion of 1800MHz band was done exclusively to catalyze the deployment of 4G in Pakistan. The spectrum in 850MHz is expected to give incentive for new entrants and will certainly foster competition.

The auction will be held on April 23, 2014. A new license will be issued to the auction winner for next generation mobile services, with terms and conditions similar to that of the previous license.

The financial transactions will be US Dollar denominated and the amount can either be paid in US Dollar or equivalent Pak Rupee.

If the winner of the auction intends to pay the remaining balance amount before the end of 5 years, it would be acceptable without any pre-payment penalty.

A late payment additional fee at a rate of 2% per month on the installment due or part thereof from the due date till paid shall be levied on the licensee. The license shall be suspended/ terminated in case licensee fails to make a payment.

In order to give certainty to the bidders, it was recommended that no related auction be carried out for 18 months from the date of auction.

However, for any spectrum which remains unsold from this auction, PTA retains the right to hold or dispose of the same as deemed appropriate.

 

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