Review of 3G/4G licences Information Memorandum (IM)
Technology companies are bracing themselves for a more challenging business environment in the wake of technology strides and more widespread use of social media.
The Pakistan Telecommunication Authority last week kick started the 90 day-long arduous process for auctioning six licenses spectrums in the 2,100, 1,800 and 850 MHz range by publishing the ‘information memorandum’ on its website. It will enable companies to provide next generation telecom services across the country.
The date of the document’s publication coincided with the annual mega gathering of the telecom sector — Mobile World Congress — held this year in Barcelona, aptly themed ‘creating what’s next’.
Dr Miftah Ismail, chairman of the Board of Investment, said:
The government hopes to raise $1.6bn from the sale of licenses in the current fiscal. The floor price in each category of the license has already been notified. We are keeping our fingers crossed and hoping against hope to fetch a decent deal.
It is a hopeful moment for the economy and the country. The impact of the deal is expected to be felt not just by immediate beneficiaries of the deal: telcos and the government. The market, and technology-driven changes in the telecom sector, have a deep imprint on the society, and progress will accentuate this trend.
The 50-page ‘information memorandum’ details rules, process, planned timetable and other relevant information for all stakeholders, particularly companies interested in the offer.
According to the memorandum, 15-year licenses will be awarded in a two-stage auction process:
- Pre-qualification stage, including a sealed bid offer
- Auction stage
The published timetable shows the consultation period after the publication of the information memorandum on February 25 will end in 11 days, i.e. on March 10. The authority will get a week till March 17 to notify any changes to rules and procedures deemed necessary on the basis of feedback. In the next two days up to March 19, information sessions will be held for prospective bidders seeking clarifications about specifics of the auction.
The interested parties will have six days to submit their applications. The deadline for submission will expire at 4pm Pakistan Standard Time on March 25. After three days, on March 28, PTA will notify the qualified applicants. By April 1, the qualified bidders will receive packages containing confidential information and instructions to take part in the mock auction that will be held on April 3.
The auction will start on April 7. On completion, provisional winners will be announced, who will submit the license payment dues in accordance with the schedule in Section 2.6 of the information memorandum. Within 30 days of receiving at least 50pc of the initial spectrum fee, the government will grant the license to the successful bidder to establish, maintain and operate next generation mobile service across Pakistan.
All five mobile companies — Mobilink, Ufone, Telenor, Zong and Warid — were contacted, but their staff in Pakistan expressed their inability to inform about the participation of their companies in the process as their senior executives were attending the global event in Barcelona.
Telecom is amongst fastest growing sectors that offers affordable telecommunication facilities to the people, democratizes information while empowering productive manpower.
The mobile subscriber base in the country has evolved at a fast pace. Currently, the market size of mobile phones is projected at around $3.2 billion. The coverage of cellular mobile is 75pc, which covers about 80pc of the total telecom market in terms of revenue.
By January 2014, according to latest available figures, there were 134 million active SIMs in the country, and that number is expected to expand to 160 million over the next three years.
People, who stand to gain most from the deal, are not cognizant of the benefits of the new technology; the government is all excited and moving confidently to sell 3/4G licenses. The telcos, in the wake of technological strides in social media platforms that are now introducing telephony options, are bracing for a more challenging business environment in Pakistan,” commented a market watcher.