Is Etisalat a Hurdle in 3G License Auction?

Confusion is prevailing over 3G license auction and it’s potential blockade due to SPA (Sale Purchase Agreement) of PTCL’s 26 percent shares.

Based on facts we had obtained through a source – we were first to uncover this theory back in November 2009 but we were never clear about this as we hadn’t seen SPA ourselves. Neither Etisalat nor the Government of Pakistan ever made this clear to us or anyone till date.

It is anticipated that Government of Pakistan can not issue any new telecom license for 7 years, i.e. till March 2013 based on terms signed in Sale Purchase Agreement of 26 percent sale of PTCL shares. While others opine that this limitation applies to LDI license only and not the 3G licenses.

But now it appears that the government of Pakistan is hurdled to auction any new telecom license due to sale purchase agreement it signed with Etisalat.

In fact Government of Pakistan itself is not cent percent clear about the terms it agreed in SPA. For instance just yesterday, Mr. Saeed Ahmed Khan, secretary Ministry of Information Technology was quoted by “The News” as saying:

Khan said that there were different views on interpretation of agreement with Etisalat in case of selling PTCL as it did not bind the government as regards 3G license.

When his attention was drawn towards the viewpoint of other ministries, he said that Etisalat deal only bound the government not to move ahead with license of LDI till March 2013.

Just one day later media produced another story which is a total contradiction of what Mr. Khan had said. Citing sources, a report published by Express Tribune said:

Sources said that there were differences over the interpretation of an agreement between Pakistan and the international telecom player reached at the time of the sale of shares of the state-owned telecommunication company.

The telecom giant was of the opinion that Pakistan could not sell a new telecom license for any spectrum until seven years, which would end in March 2013.

It’s amazing that we are getting different opinion over the same issue from government officials in matter of just two days. Express Tribune further says:

The government has taken the position that 3G license is not something new, but actually an extension of existing services. It has also a different interpretation of the time limit.

It’s not about taking the position, its about what you agreed with Etisalat while you were selling the telecom gold mine?

Here are million dollar questions, that the people of Pakistan are asking, and government must respond to these:

Question 1:

Why sale purchase agreement was never made public? After all PTCL is a public limited plus government owned company and people of Pakistan need to know the facts, it’s their basic right.

Question 2:

If this limitation of not auctioning any new license for seven years was indeed agreed and signed then who is going to be questioned (maybe legally trialed) for this blunder? Who will pay the compensation for the loss that people of Pakistan will bear? the loss that private companies will bear?

And by the way Etisalat can approach arbitration court if Government of Pakistan tries of auction 3G license despite agreeing to not to sell any new license till 2013.

Read this article in Urdu

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