An Analytic view of 3G/4G Auction Process By ICT FORUM

    Efforts made in critically important areas deserve a pat, rather than lashing, on the back.

    ICT FORUM

    Any attempt to meddle or tinker or make it controversial may create scare and may

    discourage fair participation of bidders

ISLAMABAD ( ABRAR MUSTAFA )

BAQAIICT FORUM PAKISTAN said that Efforts made in critically important areas deserve a pat, rather than lashing, on the back. And Any attempt to meddle or tinker or make it controversial may create scare and may discourage fair participation of bidders. In it report the analysts of ICT FORUM PAKISTAN, who are already overviewing the above auction process, have also gone through various new stories that started appearing after 14th April, the day 3/4 G Auction bids were submitted. These stories were attributed to some unknown sources in the Government. The Forum noted this as frustrating, and a distraction in the management of Auction process. In a rhetoric manner there had been some clarifications by Govt. and PTA. However the general perception about the process remains only partially addressed. Astonishingly in the euphoria of the campaign there is also a respectable foreign news agency’s name that attempted incredible remarks about unfinished auction process. One wonders about the motives of such smear campaign.
Without going into details of individual stories, motives or about doubts of involvement of a “foreign hand”, this Forum considers it apt to handle the ongoing process in an analytical, independent and professional manner. We are of the view that a successful 3/4 G Auction, after three abortive efforts, has become very important for society and economy of Pakistan.. Any attempt to meddle or tinker or make it controversial may create scare and may discourage fair participation of bidders.
Spectrum resource of any country is a valuable (commercial/strategic) asset and therefore its auction and process design must be in expert hands, and PTA and it’s Consultants have so far done well completing all process stages through visible and transparent process design within internationally accepted norms.
However there are two noticeable issues: (i) chances of leftover spectrum after auction process and (ii) absence of new entrant in the Auction. In the view point of our Forum these issues were always expected. That is why in the suggestions submitted by this Forum, during the consultation stage, two of the inputs given were:

(a) Initially, during the time allowed for 4G coverage, winners of 1800 MHz spectrum may be given a moratorium for that limited period, to use a part of the 1800 MHz band for any technology that they choose (eg: 2G)..”

(b) Through the IM a commitment should be given that this particular piece of spectrum, in the 850 MHz band, could also be purchased by the existing Licensees, provided there is no new bidder for it. Therefore at the stage of initial sealed bids, all bidders may bid for it. In case there is a new bidder, the bids of the existing licensees may be returned unopened.”

Both the above suggestions were not accepted. Had these suggestions been incorporated, it might have allayed negative comments that are coming now. The absence of new entrant would not have been felt and 1800 MHz band would be more lucrative for the operators, generating fierce competition.
Despite the above, we appreciate that in such broad based auction process the accepted approach is to put all the available spectrum on the table for auction and it depends on the business strategy and approach of operators which of the slots suit them so that they can apply their business sensitivity tests while finalizing their bids. In such cases, sometimes there is some unsold spectrum at the end of the auction. Internationally there are examples where the auction had been successful, yet there had been left over spectrum slots which were auctioned in later auctions.
Among Professionals and expert analysts there is an almost unanimous view that in the past few months PTA has raised its level and remained above board and comfortably addressed all intricate/complex issues of spectrum auction. It appears that enough measures through widespread consultative process were taken ensuring fair competition, extracting decent sale-proceeds through two stage bidding/auction process. Efforts made in critically important areas deserve a pat, rather than lashing, on the back.
As analysts we believe that though there was room for improvement in the auction process (as stated above), at this stage there is need to refrain from adverse/personal or biased views, Rather objective inputs & facilitative analyses/research would better serve the purpose. We, as professional analysts, wish the process a success while keeping an eye on the auction and its implementation.

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