PM Recommends the Same Price & Payment Terms for the License Renewal as of the Previous Auction

The technical committee headed by Secretary Ministry of Information Technology and Telecommunication (MoITT) for price and evaluation of benchmarks for the license renewal of three mobile operators and award of the additional spectrum has completed its report and submitted to the committee of ministers—comprising on Finance and IT ministers. The technical committee constituted by Prime Minister Imran Khan has recommended the same price and payment terms for the license renewal of mobile operators.

After the approval of the committee of ministers, the MoITT will prepare a summary for the upcoming Cabinet likely to be held on Tuesday, to seek final approval and after which the policy would be unveiled.

PM Recommends the Same Price & Payment Terms for the License Renewal as of the Previous Auction

The license renewal of two mobile operators is due in early May 2019 and one in October. The government has yet to come up with policy guidelines in this regard so far which is resulting uncertainty in the industry.

Sources revealed that the technical committee has maintained the price of $291 million for 10 MHz block in 1800 MHz band (same as Jazz won in 2017) and $395 million for 10 MHz block in 850 MHz bands (the same price of Telenor won in 2016). Further, the payment terms would remain the same as of the previous auction.

However, the committee has recommended Pakistan Telecommunication Authority to upgrade quality/standards as per the best international practices, sources maintained.

Sources said that due to delay in announcing license renewal policy, telecom operators would have little time for decisions about future investment and business plan, which is creating uncertainty in the industry.

According to experts renewal decisions should ideally be finalized 18-24 months prior to license expiry to ensure service and business continuity. The license of Telenor Pakistan and Jazz (Warid) are due to expire early in May 2019 while the license of Zong is due to expire in October 2019.

Sources further said that Zong is still facing network interference in their uplink GSM 900 MHz band due to the cross-border spillover from Indian CDMA operators. Frequency Allocation Board assigned the compensatory band to Zong on a temporary basis but a permanent solution has yet to be devised. In such situation, the spectrum holdings in 900 MHz and 1800 MHz band have to be rationalized for proper carrier planning that requires proper policy plan and the operator may be compensated which could change the revenue figure of $1.3 billion–estimated by the government.