Cabinet Seeks Legal Advice from Law Division on Cellular Mobile License Renewal

The Federal Cabinet has sought legal advice from the Law Division on the policy for renewal of cellular mobile licenses, it is learned. Prime Minister Imran Khan on Tuesday presided over the cabinet meeting to consider a 19-point agenda. The body considered an agenda item, “Policy Directive under Section 8 of the Pakistan Telecommunications (Re-Organization) Act 1996 for renewal of cellular mobile licenses in 2019”, submitted by the Ministry of Information Technology and Telecommunication.

There were many chances that the policy would be approved as the licenses of two mobile operators are due for renewal next month. Replying to a question, Federal Minister for Information Technology and Telecommunication, Dr. Khalid Maqbool Siddiqui on Monday said that the government will come up with the license renewal policy for mobile operators in the next few days.

Cabinet Seeks Legal Advice from Law Division on Cellular Mobile License Renewal

Official sources revealed that no question was raised on the strategy and other matters, but the Cabinet has sought legal input from the Law Division. Cellular licenses were issued by Pakistan Telecommunication Authority (PTA) to two new cellular mobile operators i.e. M/s Telenor Pakistan and M/s Warid Telecom on May 26, 2004, for a period of 15 years, under the Mobile Cellular Policy, 2004, on payment of $ 291 million after the auction.

The cellular license of M/s Paktel Limited now China Mobile Pakistan (Zong) was also renewed by PTA under the 2004 Policy on October 23, 2004, for a period of 15 years on payment of $ 291 million. These licenses are now due for renewal on May 25, 2019, and October 22, 2019, respectively.

In 2014, the government of Pakistan renewed the licence of the state-owned entity, Ufone, at $291 million through interest-free payment installment in order to maintain a level playing field. Telenor Group has recommended that upcoming licence of Telenor Pakistan and other operators be renewed under the same terms and conditions.

M/s Veon, one of the largest foreign investors’ in Pakistan has sought predictable and transparent investment climate and licence renewal price of not more than $291 million.

Section 8(1), 8(2)(a) and 5(2)(a) of the Pakistan Telecommunication ( Re-Organisation) Act, 1996 provide the policy framework for determination of terms and conditions of licences.Section 8(1) states that the federal government may, as and when it considers necessary, issue policy directives to the Authority, not inconsistent with the provisions of the Act, on matters relating to telecommunication policy referred to in sub-section (2), and the Authority must comply with such directives. 8(2) the matters on which the federal government may issue policy directives shall be-

• (a) the number and term of the licences to be granted in respect of telecommunication systems which are public switched networks, telecommunication services over public switched networks and international telecommunication services, and the conditions on which those licences should be granted.

The Ministry of Telecommunication had submitted the following proposals to the federal government for consideration:

• The renewal price for the right to use frequency spectrum included in the licences being renewed shall be in accordance with per MHz price benchmarks from frequency spectrum auctions of 2016 and 2017 i.e. per MHz price for frequency spectrum in 900 MHz and 1800 MHz shall be $ 39.5 million and % 29.5 million respectively
• The tenure of the renewed licences shall continue to be 15 years;
• Payment term shall be 100 percent upfront or 50 percent upfront with remaining 50 percent on five equal installments on Libor+3 percent
• Licences renewed under this policy directive shall be technology neutral in line with existing GOP policies
• Provision of spectrum trading/ sharing as per the approved regulatory framework for such sharing/ trading will be incorporated in the renewed licences by PTA
• Terms and conditions relating to coverage, enhanced Quality of Service (QoS), etc, under the renewed licences, shall be incorporated by PTA in line with Telecom Policy 2015 and as per applicable regulatory practices
• Frequency Allocation Board will provide options in lieu of cross border interfered spectrum to CMPak (Zong in 900 MHz band included in its current licences. In case of non-acceptance of proposed options, renewal of CMPak licence and its associated spectrum ( 2x 13.6 MHz) shall be dealt in accordance with S.No.4(v) of 42nd Board’s meeting decision ( i.e. without any compensation in terms of additional frequency assignments