$100m Investment Withdrawn – Thanks to High MVNO Fee

As feared, investors are backing off with their plans to invest millions of dollars in Pakistan due to high MVNO fee – claimed “The News” in its recent report.

Newspaper said that at least one out of three companies, which had applied invest in industry, has withdrawn its decision to invest $ 100 million, due to increase in the license fee by the Pakistan Telecommunication Authority (PTA).

Friendi Mobile had entered into an agreement with ZONG, back in November 2009, and was planning to invest up to $100 million in Pakistan, reported the paper, quoting Haider Raza a venture partner of ePlanet Ventures that is funding the Friendi Mobile.

We decided to drop the idea of investing in Pakistan when PTA increased the licence fee from $10,000 to $5 million, now this investment would be made in Kuwait where the licence fee is only $5,000. It is far better for us to invest in our service instead of giving $5 million as the licence fee.

MVNOs could bring in FDI of $100 to 200 million and light the path for other telecom and internet investments, said Haider Raza

Friendi Mobile, funded by US-based ePlanet Ventures, is actively involved in acquiring MVNO licences. Friendi is the first pan-regional MVNO in the Middle East.

Secretary Telecom, Najeeb Ullah Malik said that he was unaware of the issue. Fixing licence fees is the role of PTA, he said.

An independent expert who was in the past involved in the making of the MVNO policy said that the huge MVNO licence fee was unjustified as the government had already sold the spectrum to cellular companies. The MVNO would not be allocated a new spectrum rather they would only use the existing spectrum of the different companies so it was unfair to ask them to pay an exorbitant fee, he added.

Chairman PTA, Dr Yasin, talking to The News said the licence fee was an irrelevant issue, as it did not make any difference to investors. The PTA had had a bitter experience of low licence fees in WLL and Pay Phone cases so it would not repeat the old mistake again, which is contrary to what serious investors are saying, he added.

Other MVNO operators interested investing in Pakistan includes Roshan Telecom. While there are more looking for the trends and possibly a regulation change.

It merits mentioning here that according to a framework for MVNOs, MoIT had advised PTA for $10,000 license fee, however, PTA regulated 5 million dollars for one MVNO fee.

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


  • Unis Khan

    Thank you very much PTA…………

  • Make money with Abdul

    That is a substantial loss for Pakistan. The fiscal policies should go through a cost benefit analysis before being implemented. From the sound of this, doesn’t sound like they’re already doing any such thing. :(

  • Adam Ali

    PTA Zinda bad…. :-)

  • Saeed

    It’s really very bad news and i don’t know, PTA are CRAZY to increase the license fee from $10,000 to $500000/-, i think the management are not OK and they drunk too much at that time to increasing the fee.

    Yaar every Government peoples are in the racing to filled UP their Bank Accounts and then go to abroad to live there in their most expensive areas.

    All you knows what our ex-Pres. Mr. Pervaiz Musharraf , he is living in UK most expensive area. What was the salary for Army chief?

    Anyway, Allah Pak hi chala rahay hai is Pakistan ko warna yeh govt peoples tu sub ko bok say Mar day.

    • Tahir Mueen

      Saeed sb u are right the PTA MANAGEMENT is really ________ & that is why they have made this STUPID MISTAKE.

      [Comment Edited]

  • Altaf

    PTA is just interested in filling their pockets, rather than supporting industry!

    PTA should focus on regulation rather than earning excessive money from other operators!

    • Tahir Mueen

      Altaf sb aoa u are right PTA is interested in filling their POCKETS & CHAIRMAN PTA is such a SHAMELESS PERSON that since he has come as CHAIRMAN INDUSTRY has been ruined.

  • ali hamdani

    The blame can not just be upon the state policies. There are many other factors bind with these decisions. One very important factor is that why would investmenent such as’ Friendi’ want to come in Pakistan when there are so manhy security issues. Even if they do decide to come in locals give them problem with their policies not keeping in mind how many jobs will be created. I praise ‘Friendi’ for invetsing 100 million dollar in Pakistan even after knowing the fact that telecm companies like Telenor are on their hit list.

  • anonymous

    Pakistan is fu**ed up by these policies

  • Muhammad Bilal

    I am sorry to say, but PTA is a place of corrupts, just like other government institutes…May ALLAH bestow HIS blessings on Pakistan..AAMIN

  • Jamil Ansari

    Sensationalism! That’s what this news item is all about.

    Shifting to kuwait because of license fee is ridiculous….as if Kuwait has a comparable market in terms of population and purchasing power.

    MVNO essentially works where there are suffcient pricing margins and excess capacity….in case of Pakistan, tariffs are rock bottom and mobile operators do not have the excess capacity especially in the urban markets.

    Similarly market hasnt proved to be quality conscious…infact quality issue is addressed through MNP

    the News has only one agenda and it’s blindly following it….it’s time for responsible journalism and just creating thar thallian through catchy news!

  • mary

    10000 pta fees and 4900000 as zardari tax samjha karo yaroo

  • MOHAMMED

    jub hum sub awaan(including me) sorahay haain jub hum khud hi corrupt haain tau hukamraan konsay asmaan say utray huway ferishtay haain?? jub tak hum khud nai theek honay walay is mulk nay isi tarhan chaltay rehna hai.

  • ePlanet – isnt that the organization that used Bilal Musharraf (son of ex-tyrant) to get doors opened in the middle east and Pakistan?? They no longer have Bilal linked on the profile pages, but the page can still be seen at
    http://www.eplanetventures.com/en/team/team_ic_na_musharraf.html

    The legitimacy of such organizations is tainted to say the least.

  • zardari

    Hello my People

    I am only doing this for your own benefit. I am not taking advantage of my people. Fairness and zero corruption tollerance is the move forward.

    Regard
    Zardri President

    • Mo

      zardari … lol

  • Shahzad Hasan

    Thank you Mr. President !