Policy for Renewal of Cellular Mobile Licenses Delayed Once Again

The federal cabinet on Tuesday once again delayed the approval to policy for renewal of cellular mobile licenses and constituted a five members committee for further deliberations. However, Policy for Renewal of Cellular Mobile Licenses Delayed once Again.

Prime Minister Imran Khan on Tuesday presided over the cabinet meeting to consider 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.

However, Minister for Information and Broadcasting Fawad Chaudhry said that Pakistan Telecommunication Authority (PTA) submitted a report to the cabinet for the policy renewal as was directed by the Prime Minister. It is multi-dollars transactions and it was felt that there is a need for further deliberations, he added.

Renewal of Cellular Mobile Licenses Delayed Once Again

PM Khan constituted a five members committee comprising on Minister for Information Technology and Telecommunication Dr. Khalid Maqbool Siddiqui, Federal Finance Minister Asad Umar, State Minister for Revenue Hammad Azhar, Advisor to Prime Minister Abdul Razzak Dawood and Federal Minister for Privatization Mian Mohammad Somro for reviewing PTA report. After their consensus, the policy would be approved for renewal of mobile licenses.

The government has estimated to generate around $1.3 billion from the renewal of three mobile licenses which are due to expire in the current year. Federal Minister for Information Technology and Telecommunication Dr Khalid Maqbool Siddiqui last week stated that the matter of mobile license renewal has been completed and the approved by the cabinet is expected.

He further said that government issues policy directives to Pakistan Telecommunication Authority (PTA) for implementation and would complete the renewal process as well. With every change, there is need for amendments in policy and it has been with some adjustments, said the minister adding that all the matters would be resolved amicably.

The government has estimated to generate around $1.3 billion from the renewal of three mobile licenses

The draft policy was presented in the cabinet meeting held on April 2, 2019, but after some reservations from the Frequency Allocation Board (FAB), legal advice was sought from the Law Division on the policy for renewal of cellular mobile licenses. According to the minister, the adjustment has been matter and the policy is expected to be approved on Tuesday.

Cellular licenses were issued by 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.

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

In 2014, the government of Pakistan renewed the license 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 license 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 a predictable and transparent investment climate and license 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 licenses.

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 licenses 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 licenses 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 licenses 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 bands included in its current licenses. 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.