The government formally handed over a 4G licence to Jazz, the successful bidder.


The government formally handed over a 4G licence to Jazz, the successful bidder.

Earlier in May, the government had auctioned the technology neutral licence for 10 MHz of frequency spectrum, and Jazz Pakistan was the only company that had participated in the auction and submitted its bid for the $324.5 million licence.

The newly-awarded licence will enable Jazz to launch 4G services in Pakistan, making it the third 4G operator in the country.

Jazz had the option to either pay $295m plus 10 per cent ($29.5m) tax on the auction winning price to the Federal Board of Revenue (FBR) upfront or make a 50pc payment upfront and pay the remaining amount in five equal annual instalments at an interest of 3pc every year.

The successful bidder, however, submitted the entire license fee of $295m.

Finance Minister Ishaq Dar and State Minister for Information Technology and Telecom Anusha Rahman were chief guests at the ceremony held on Friday.

Mr Dar congratulated the IT minister and the Pakistan Telecommunication Authority (PTA) for successfully completing the auction, and said the auction had been conducted in accordance with the best global practices.

The finance minister highlighted various incentives for the IT industry, announced in the budget for FY 2017-18, which it could avail from next month.

Ms Rahman joined the finance minister in congratulating all stakeholders, and said that the Ministry of IT and Telecom had conducted three spectrum auctions in the last three years.

She said that broadband penetration had increased phenomenally from less than 3pc in 2013, to more than 29pc. The new 4G licence awarded to Jazz would further enable provision of high-speed connectivity and add associated socio-economic benefits to citizens of Pakistan, she added.

Jazz CEO Aamir Ibrahim extended his appreciation for various initiatives taken to expand Pakistan’s overall digital ecosystem.

The PTA maintained that despite scant interest from other cellular companies, the auction had brought in one of the largest foreign exchange investments compared to any other sector. The price of the spectrum was set on the higher side by the auction advisory body – $85m more than the asking price for the same spectrum in 2014, the regulatory body said.

An official at Ufone said the price set for 4G services was too high as was the price of 4G-supported cellular handsets. “We did not feel that consumers were ready for 4G services because the price of 4G services is too high and out of reach for the average subscriber,” said the official.

An official at Zong (China Mobile) maintained that his company was set for the future and did not need the additional bandwidth.

Published in Dawn,