PTA Briefs Media on 3G / 4G Spectrum Auction

Chairman_PTA
Dr. Ismail Shah, Chairman PTA (First from left) and Mr. Tariq Sultan, Member Finance, PTA (Second from left) and DGs of PTA during media Briefing

Dr. Ismail Shah, Chairman, Pakistan Telecommunication Authority today held an interactive session with media personals from print, electronic and digital media to brief them about the on-going 3G / 4G spectrum auction.

Chairman PTA explained that why 3G — and particularly the 4G — spectrum auction was necessary for the economic and national growth of the country. In fact, he said, the economy was being impacted negatively with all the delays and abortive efforts to auction next-gen services in the country.

Mr. Tariq Sultan, Member Finance and DGs of PTA also accompanied Dr. Ismail during the briefing.

Dr. Ismail said that over 500 operators in 203 countries are offering 3G services, while over 101 countries have 4G services.

He said that auction process was initiated when the Government of Pakistan issued a policy directive on Spectrum Auction for Next Generation Mobile Services.

PTA started the process for hiring reputed international consultants to design and manage the auction process. After meeting all the procedural requirements and PPRA Rules, ‘Value Partners Management Consulting Limited’ was selected on 23rd November 2013 from among five shortlisted applicants. The contract with the consultants was signed on 19th December 2013.

Dr. Shah explained that PTA has ensured that entire process from hiring the consultants to auction design and implementation is transparent, efficient and according to the very best international practices. To this end, PTA has held detailed consultations with all stakeholders during the entire process to ensure that everyone is on-board for this important event.

Chairman said that each and every aspect of the auction is being documented and will be available for general public after the auction.

Spectrum Auction Process

PTA published the final Information Memorandum, developed together with Value Partners, on 17th March 2014. A total of 50 MHz was offered as part of the auction, where 30 MHz was offered in the 2100 band and 20 MHz was offered in the 1800 band.

The auction is designed in two stages

  1. The Sealed Bid Stage for demand exploration
  2. The final auction on April 23rd, provided demand received is greater than supply.

Based on the received sealed bid on 14th April 2014, it is now clear that received demand is greater than supply, said Chairman PTA. Therefore, the final auction will be conducted on 23rd April 2014 as planned.

For the auction, PTA has chosen the Simultaneous Multiple Round Ascending (SMRA) Auction mechanism. SMRA is the most preferred auctioning mechanism and is widely used in modern day auctions worldwide. It is also preferred over the traditional open cry out auctioning model as SMRA allows both auctioneer and bidder flexibility to simultaneously bid on lots of their choice, privacy and time to make educated decisions during the auction.

Some of the recent auctions conducted in United States, Sweden, Norway, Hong Kong and Canada were all SMRA based auctions.

Spectrum Lots

Dr. Ismail said that spectrum lots are designed with aim to increase competition. He said that final information about lots’ configuration – for both 3G and 4G spectrum – is kept confidential for now.

It maybe recalled that as per earlier information lots’ configuration was as following:

  • Lot A:
    • One 3G spectrum of 10 MHz from 2100Mhz
    • One 4G spectrum of 10 MHz from 1800Mhz
  • Lot B:
    • One 3G spectrum of 10 MHz from 2100Mhz
    • One 4G spectrum of 10 MHz from 1800Mhz
  • Lot C:
    • One 3G spectrum of 5MHz from 2100Mhz Band
  • Lot D:
    • One 3G spectrum of 5MHz from 2100Mhz Band

Earlier on, it was communicated that 3G and 4G spectrum in Lot A and Lot B were tied. Meaning that, operators had to buy 4G if they were to buy 3G spectrum from Lot A or Lot B. However, this may change during the final auction.

Exact lot configurations are being designed with maximization of over all benefit in mind, the Chairman said.

Base Prices

  • Base price for 10Mhz block from 2100Mhz is US 295 million
  • Base price for 10Mhz block from 1800Mhz is US 210 million

PTA said that these prices were calculated after extensive market assessment and spectrum valuation by the PTA consultant, Value Partners.

A successful bidder must pay either 100% upfront or 50% of the winning bid amount within 30 days and remaining 50% with markup @ Libor + 3% will be paid in equal annual installments over a period of 5 years.

Licenses to successful bidders will be issued for a period of 15 years.

SMRA Auction Features

  • All lots are auctioned simultaneously over a series of rounds.
  • In each round, bids will be submitted on individual lots at the announced prices.
  • At the end of each round, a standing high bidder is identified for each lot.
  • The standing high bidder is committed to the lot and cannot withdraw.
  • The standing high bidder is released from its commitment when outbid by another bidder.
  • When a lot receives at least one bid, the price for the lot increases in the next round. The bid increments will be upto a maximum of 3% of the last bid price, which will be decided by PTA after each round in consultation with the Consultant.

Expectations

Spectrum auction to make mobile broadband services available to consumers is a landmark event in the history of Pakistan’s telecom sector.

Pakistan’s telecom industry is several years behind the rest of the world where 3G networks have already matured and operators are in the process of launching 4G networks since 2010. Offering spectrum in different bands allows the Government to maximize revenue (The combined base price value of 50MHz spectrum brings greater than $1 Billion investment into the Pakistani economy)

Offering both the 2100 and 1800 bands allows telecom operators flexibility to deploy both 3G and 4G networks and offer the most advanced mobile services to their customers. For the consumer, availability of high speed mobile broadband services in both urban and rural areas will encourage a more connected community and promote e-commerce related activities.

It is hoped that next generation mobile services will be an enabler towards GDP growth, introduce more innovative e-services such as E-medicine and E-education to facilitate population in rural and remote areas of Pakistan as well. The deployment of 4G technologies will also provide our Engineers and technicians to acquire the latest skills and thus become competitive in the international market.

The successful auction of this spectrum is expected to create 900,000 + jobs in the Telecom sector and will have multiple benefits for the economy of Pakistan.

Chairman PTA appreciated media’s role during the whole process, except once instance. He invited the media personals on April 23rd, 2014 to witness the 3G and 4G spectrum auction.

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


  • Alamdar Raza

    Maybe an operator who buys 5 mhz of 3g spectrum will be allowed to bid for the 10 mhz of 4g spectrum…4 days away…will the auction be shown on any tv channels ?

    • Usman Ali

      yeah it will be shown on one channel.the channel used at PTA office for security cameras :P

    • Tanveer Ali

      4G licence will be given to operator which will buy a 3G 10 MHZ in 2100 MHZ.

  • Asad

    mulak ka media politicians ko black mail ker setka hai.. but itna taiz nai hua k Phd doctor chairman PTA ko phudo lagae.. well done !!

    • Guest

      or wesay b media k naliak logon ko Technical chezon ki ABC bhi nai pata .. inhein sirf bhonkna ata hai cameray k saamnay.. or in media walon ki akal ka andaza is say lagay ja sekta hai k kisi ney puuchna gawara nai kia k WARID bagheir new license k 4G kesay run ker lay ga on old license !! ho sakta ya owner of warid Al nahyan bin mubarak nahyan ney koi game daal le ho or nawaz sharif ko convince ker lia ho !!

      • Ussi

        Dear Asad
        Yes Warid could deploy the 4G network on its existing band as its current license is technology independent. But to do so Warid has to do refarming of its current band used for DCS/GSM services. And Warid has to also pass the minimum technical requirements standardized by PTA for a 4G network.
        Yes its true media in Pakistan run all news without verifying their creditability of their sources, just like you bashed about Warid and its 4G network deployment aspirations..
        Cheers

        • Bilal Iqbal

          you are right but it seems very difficult (technically) to deploy 4G over existing infreastructure… Pakistani people first time enjoyed high quality voice calls with 1800 MHz after launching of Warid and Telenor and it would be a bad decission to leave voice trafic over 900 MHz band…
          let’s see…

        • Asad

          Dear Ussi.. from ur comment it is pretty evident that u r some technical shit working in some operator !! aniway wot ever shit u have written above is known by every one and if u read my comment above.. i have clearly written that how govt. will allow Warid to do so on old 2g license no matter it is technology neutral !! Govt. always sign agreement with terms and conditions and they can change it and impose there power any time they want.. and Ministry of finance is not that stupid that they will allow warid to run 4G without giving any single penny !! thats wot i was saying .. u seem to be some geek telecom 9-6 engineer for sure … !! please try to broaden up ur mind a bit.. and see things on govt. level not ur bloody company level …

    • Usman Ali

      shaikh mubarak al nahyan nay to setting ker li hoge nawaz kay sath, per wo jo million dollars ka license buy ker rahay hein unki setting nhi ha…bhool jao agar warid nay loophole dhonda ha or kerna chahay bhi to ye kernay koi nhi day ga.

      • NSN

        Dear Usman and Asad its better for us if all operators go for it at the same time at least prices will be in control .Warid has the potential to do it so they are going for it and i think there is nothing wrong about it,and if u belong to any operator then i cnt say any thing

        • Asad

          ho sakta hai baki operators supreme court chalay jaein or case ker dein warid ki strategy per .. is scenario mein stay ho jaye ga or auction pending ho jaye ge .. atleast 4g ki … mulk ka nuksaan he ho ga !!

        • Usman Ali

          yeah its good, but there are some rules of every game. i’m not belong to any company but this is not such thing you say warid plays smartly. good if everyone gets the service and rates will be low.if they get in this way its ok i have no issues

    • sajan

      No its not any deal by warid owner but just a lollypop by warid to its customers who are switching to other networks these days at a higher pace and they must do so as having the worst coverage status and shortly the oldest technology status, they had to adopt this way to survive a little more.

      • NSN

        wellcome warid.hahahahah why u peoples are so worried about 4g techonology of warid ,we have to chilllll dear

  • Bonga

    Again, no new or real piece of information, except “……… operators had to buy 4G if they were to buy 3G spectrum from Lot A or Lot B. However, this may change during the final auction.”

    If I were to read this particular verbiage, I am led to believe that there is more demand for 2100 MHz than 1800 MHz or why would rules of the auction be changed so late in the game?

    A few other piece of information would have been worth mentioning such as what is PTA’s plan for 850 MHz, will Etisalat be granted new spectrum in light of its outstanding balance of $800 million for PTCL acquisition, Warid’s announcement to launch LTE, etc.

    Like I said, no real news!

  • Z

    Everything is kept confidential from the pakistani nation .jiye sharif brothers :p

    • Usman Ali

      a real pti supporter
      without any sense or reason just go against nawaz sharif

  • Qaisar Khan

    Dear Propakistani Please make when ever you make post(especially regarding 3G/4G) please make urdu copy of that.
    I will be very thankfull to you.

  • Ashraf

    Conclusion of this whole story is after 15 years, operaters will have to fight again for renweal of their 3g / 4g license and at that time world will be enjoying 10g services :)

  • Farooq Meo

    Dua kro ETISALAT ko 3G na mily, inohn ne PTCL ke employees ko paralyse kr dia hai, Media ko highly bribe kia hua hai, Aaj tk in ke against koi khabr nhi aie

  • sana

    i was just reading comments here someone says that when pakistan will have 3g servise at that time other countries will use 10g servise.we are luckiest to have 3g and 4g both in our country at same time..so why to blame welcome it.know its coimg to pakistan so dont be negative just welcome it..we PAKISTANI will be never happy in any condition..

    • Bilal Iqbal

      and interestingly such people will be the first to avail these technologies… :P

  • Rashid Iqbal

    well done PTA, the chairman brief about 3G/4g all the news on social media are baseless now wait for auction.

  • Rashid Iqbal

    Yes its true media in Pakistan run all news without verifying their creditability of their sources. now the chair man of PTA clear and brief about 3G/4g

  • rimsha khan

    I hope it was the need of the hour. Alot of benefits would be attained by 3G. Economic activity and creation of Employment would be the best plus points we will attain…

  • Rashid Iqbal

    The Supreme Court of Pakistan on the request of Chairman Pakistan
    Telecommunication Authority has asked the media representatives not to
    sensationalize and mis-report 3G/4G auction.

  • Tanveer Ali

    Auction is going to be fair. PTA has right to set conditions regarding bids as they are organizing auction. In my point of view these conditions are fair.

  • shami

    Base price for 10Mhz block from 2100Mhz is US 295 million
    Base price for 10Mhz block from 1800Mhz is US 210 million
    Now imagine how much operators will mint money from consumers by their expensive packages to recover their above mentioned license costs and make profit after recovering the above cost :(

  • Tanveer Ali

    We want best with no price. Everything have price.

  • Sadam Waqas Khan

    Now media should promote this auction because 3G auction is much needed for Pakistan.

  • Jamshed Khan

    i think Auction will Not be shown but News it will Come

  • naveed

    every thing will be clear…