Is Etisalat Hurdling in 3G License Auction in Pakistan?

It is anticipated that Etisalat is not letting the government of Pakistan to auction 3G license in Pakistan, due to its agreement of purchase of 26 percent shares in PTCL.

We know that 3G license auction has been delayed notably in Pakistan. Earlier it was reported that 3G licenses will be auctioned in February 2009, however, it couldn’t happen.

We know that there was a section in PTCL’s sale-purchase agreement that government of Pakistan will not issue any further Telecom license in Pakistan for next 7 years. Meaning that no further license to any telecom operator till 2013.

A source who spoke with high ups at Ministry of IT and Telecom, got it confirmed that 3G license will be a telecom license in nature, with fresh attributes – meaning that if there was this point mentioned in PTCL’s sale agreement then government of Pakistan cannot issue any new telecom license (that is a 3G license) till 2013.

It merits mentioning here that PTCL’s sale agreement is still not made public, so we can’t quote the exact wordings of the agreement. However, we know that Zong has been struggling for LDI license, which has been delayed by the PTA for same reasons. Even China Mobile incentivized the government and said CMPak will bring US 500 million dollar investment if LDI license is granted, however no development has happened as of now, thanks to the Sale of PTCL.

There were evidences of differences between Government of Pakistan and Etisalat lately, over multiple issues. It was also reported that there were committees formulated to resolve these issues, including new license thing.

PTCL, Etisalat didn’t respond to our queries regarding this.

It is not comprehendible at all that why the SPA (Sale Purchase Agreement) was not made public, despite PTCL is a government’s asset and also listed in stock exchange.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • K. Shahzad

    If government had done any such agreement with Etisalat to not to give any telecommunication licenses in next 7 years, indeed this was the most foolish and the most stupid thing ever. How can you stop all development in a sector for just contract with single company.

    Specially in this case when performance of PTCL gone down too much how can you stop giving licenses for just such organization which is always going down.

    These guys Know how to introduce new services but don’t know how to keep the quality up for all the service.

    • mYounas

      Well said That’s very very true….

  • The Mgt

    If that is the case pakistan will be the last country in the region to get 3G. late commers like india and thailand will have 3G before us.

    At a seminar endorsed by the National Telecommunications Commission (NTC), the GSMA highlighted that Thailand will gain significant economic and social benefits through this new wave of investment in mobile infrastructure. Based on calculations by LECG, a global economic consultancy, annual industry investment of US$1 billion per year could mean annual GDP gains of US$2.3 billion and nearly 80,000 jobs per year over the period of 2010-2014. The LECG report also highlights that the upcoming 2100MHz spectrum license offers Thailand a significant opportunity to encourage further investment and competition in the mobile telecommunications sector. A well-designed and transparent spectrum auction process is likely to generate the most efficient use of scarce spectrum.

    “The GSMA believes that any further delays and changes in the licensing programme would affect the country’s credibility, increase uncertainty and the risk perception associated to it. This would in turn reduce the chance of receiving the investments that are vital to the Thai economy to recover from global recession,” said Sebastian Cabello, Regulatory Manager, GSMA. “The impact of Mobile Broadband technologies in emerging markets is transformative and will play a crucial role in narrowing the “digital divide” in broadband between developed nations and nations like Thailand.”

    A recent World Bank econometrics analysis of 120 countries estimated that for every 10-percentage-point increase in the penetration of broadband services, there is an increase in economic growth of 1.3 percentage points (Qiang 2009). This growth effect of broadband is even stronger in developing countries than in developed economies. In Thailand, in particular, investing in advanced mobile networks would boost its incipient software applications and local content industries, increasing enterprise connectivity and enabling greater mobility across its territory.

  • yasir

    Right to exercise the freedom to enter into the telecom market with what soever standard and techniques by any telecom operator, vendor is quite insane if being restricted and only one operator is allowed the hegemony and monopoly in pakistan telecom market.

    Why not the others are kept away and discouraged ??

    Why not the terms and conditions over which the ptcl privatized, the public sector property, are brought in the lime light ?

    PTCL is the future of our next generations and it cannot be let on to be on stake for the fulfillment of the dreams of few at the cost of the future of the next generation of pakistan.

  • guru

    PTCL is a monopoly, not a future. The purpose of privatization is to create competition to improve the quality of service and prices for consumers. PTCL tries to defend its poor quality of service by blocking out competition through unfair practices.

    That is not acceptable. Etisalat should not be controlling PTCL with a 26% ownership only. If Etisalat wants to control PTCL, then it should increase its investment to 51%. Otherwise, the government should do the 3G auction soon where it can raise more forex through investment by foreign operators.

    This protection of Etisalat is actually backfiring for the govt and the local telecom market. If 3G does not happen in 2010, then 3G will never happen in Pakistan. By 2013, 3G will be an outdated technology for mobile phones.

  • NH

    Please do note that Etisalat has not even paid for the 26%. In other words , its an illegal occupation of PTCL !! The corrupt leaders of our country dont want to take a “pangaa” with the sheikhs as they have their investments in Dubai … get the real picture ? Propak was quite articulate in exposing all the wheeling dealing..
    the whole deal wreaks of corruption. May Allah give Chaudry Iftikhar the strength to send the
    shady arabs packing.

    Shame on all politicians who have sold a national asset for personal gains.

    Just look what Etisalat is doing, it has eliminated over 300 network operators, the last few standing also want to get out of Pakistan. With the current conditions no one is prepared to put Billions of dollars into rolling out 3G !!

  • usman

    I totally support all the comments regarding the above captioned subject about the hugemony of Etisalat in the the airs of Pakistan , dominating and controlling one the very key stretigic aset of this land in an illegal way without making the full payment.

    As far as the arabs are concerned about the telecom buisiness , these are totally non-professinal people.

    they cannot run the telecom buisiness like the profesionals ie singtel, BT etc etc.

    In pakistan they have totally ruined the telecom market.

    Also as their role as employers, every body has seen here that how they abused the Techinical people, the engineers.

    and changed the ptcl shape into a place of evil practices and sins.

    so these people are totally ignorant about the buisiness in the telecom sector and our rulers are the hell like curse upon us which are totally bent to knee before the Etisalat because of thier investment in Dubai and Zardari is totally faithful dog to these Arab invadors becuase of Banazeer property along the Shk Zayed road in duabi.

    To the chairman of the other dept President Zardari orders to come to his oofice and speak while to the presedent PTCL Walid Irsaid, What does the president of pakistan does “”

    MR Zardari requests to President PTCL Walid Irshaid to kindly come and see him if the time is avaialable whenever possible with Walid Irshaid.
    And what does the President ptcl do in response to this request by Zardari,
    The PResident ptcl does not bother to take care of what so ever Zardari is requesting .

    So such is the state of affairs here in pakistan.

    Walid Irshaid went to the extent of saying in a place ” Govt , No Govt here in pakistan, It is Etisalat here ”

    No Govt officail no army wants to indulge with the Arabs Badowans.

    For cooment pl write

    [email protected]

    • Majid Ali

      Please provide reference of Mr. Walid Irshaid words:

      “MR Zardari requests to President PTCL Walid Irshaid to kindly come and see him if the time is avaialable whenever possible with Walid Irshaid.
      And what does the President ptcl do in response to this request by Zardari,
      The PResident ptcl does not bother to take care of what so ever Zardari is requesting .

      So such is the state of affairs here in pakistan.

      Walid Irshaid went to the extent of saying in a place ” Govt , No Govt here in pakistan, It is Etisalat here ”

      No Govt officail no army wants to indulge with the Arabs Badowans.”