3G and 4G Auction in Pakistan: A Dispassionate Analysis!

balance

The experts of Information Communication Technology (ICT) Forum PAKISTAN have attempted a dispassionate analysis of strengths and weaknesses of the Spectrum Auction conducted on the 23rd of April 2014. The experts have also briefly analyzed some of the criticism.

Strengths

The biggest achievement of this auction – and consequently of PTA and the Government – is that it has been conducted in a very smooth and orderly manner, without generating any controversy of any wrong-doing. Therefore, congratulations are due to all those who worked for this achievement – in the Government as well as the PTA.

The whole process was carried out in a transparent and fair manner. The consultation process was open and accommodating. This resulted in PTA revising its first draft IM a couple of times, which is a proof that PTA remained flexible in accommodating views of stakeholders as far as possible.

There has been no evidence of any collusion on part of the operators. In fact it appeared that none was needed in the end. While two operators took an apparently aggressive approach, the other two took a cautious and conservative view of the market, settling for half-slots (not a recipe for providing best possible services in the 2100MHz band, which is already challenging). Evidently there was no reason to collude.

It was no ordinary spectrum auction, many of us lose sight of the fact that four of the global top ten operators took part in this auction – China Mobile, Vimplecom, Telenor and Etisalat! We really do not understand Government’s enthusiasm on wooing in a “new entrant”.

Weaknesses

It must be clarified that talking about weaknesses is not blaming anyone, but to learn lessons.

A “temporary” failure of this auction has been the two slots having remained unsold – the 850 MHz (old Instaphone) slot, and the second 1800MHz slot meant for 4G. We term it as “temporary” because the assets are still with the Government and can be sold at a later date. In our view it was all the time expected that these two would remain unsold, and we are not saying this only in hindsight.

For the 850 MHz slot, in our comments and suggestions on the Information Memorandum (IM), we had proposed as follows:

“Through the IM a commitment should be given that this particular piece of spectrum, in the 850 MHz band, could also be purchased by the existing Licensees, provided there is no new bidder for it.

Therefore at the stage of initial sealed bids, all bidders may bid for it. In case there is a new bidder, the bids of the existing licensees may be returned unopened.”

As mentioned above, with four top level, well-entrenched operators in Pakistan, we feel that it was quite clear from the beginning that no new entrant would come.

In the same set of comments and suggestions on the IM, we had expressed our apprehensions regarding the 1800MHz slot. Our suggestion was:

“Initially, during the time allowed for 4G coverage, winners of 1800 MHz spectrum may be given a moratorium for that limited period, to use a part of the 1800 MHz band for any technology that they choose (eg: 2G).”

Those in the industry know that (i) mobile operators in 2G are hungry for additional bandwidth and (ii) 4G is going to take some time to take off, and it’s roll-out obligations allowed that. Therefore we thought it was only logical that allowing usage of 1800MHz for 2G in the interim period would have the mobile operators scrambling for it.

Criticism

Despite the overall process being fair and clean, carried out in an equally fair and clean manner, some criticism has been made, which in our opinion is mostly unjustified.

Some experts have opined that the 3rd slot of 3G should not have been split in two slots of 5MHz each. However, in that case the Government may have earned some more money, but making the money earned by the Government as a criteria of success, seems to be a short-sighted approach.

Secondly, in that case, one of the four operators would have lost out. Imagine if that operator had been the only one owned by the Government itself.

Those who try to stop Pakistan from taking any step forward, could only come up with just one controversy – the one about the incomplete team at PTA. Incidentally such things coming from frivolous litigators may be understandable, but not from our honorable Senators.

Going Forward

Thanks to the hard work of the Government and the PTA, Pakistan has finally entered the era of 3rd and 4th generation Mobile Technologies, long after it was supposed to have happened.

The real work of making meaningful and productive use of wireless broadband starts now. It involves using broadband as a vehicle to deliver Citizens Services at their doorsteps, particularly to the 60% population that lives in rural areas.

Citizens Services pertaining to Education, Governance and Healthcare need most urgent attention, and the Government should chalk out a proper plan for the same – just as several other countries are doing.


  • Shoaib Khan

    Nice article

  • Abu Khuzaima

    Agree to it. But for true success a lot depends on operators as how they’l strike balance in assuring QoS and affordability.

  • test

    Warid will get the 4G licence

    • PK-BRO

      Warid sleeping for 6months , after check&balance 3g,4g in pk…then aspect LTE 4G.

    • Temptation

      Forget about 4G, tell us who is next in-line to buy Warid out. Unless there is commitment from the management to make any progress a company like Warid cannot deliver. And at the moment company management is only committed to sell out warid.
      You should say thanks to Warid startup team that choose Ericsson for technology backbone otherwise Warid would have been history by now

      • ali

        100000% agreed with Temptation….. Ericsson is the only reason behind network stability.. Thanks to the pioneers of Warid planning team..

  • tiwana

    If the government decides to sell out three 3g licenses instead of four then the one operator of them will lose the license, which will lead their customers to port out or buy a new connection and the operator who lose the license would not compete the market like warid in future.

    • yasir

      I think ur wrong
      Not every person in over country knows what is 3g & 4g and how to use it. There’s a big number of people who use there phone for just calling. So in this kind of situation warid may be able to servive by going cheap.(cheapest call rates)

      • ali

        it will never happen.Currently Warid can not afford to lower down the rates. not at all.. man you are not well aware of Warid financial statement…

        • Suhail

          Agreed! even warid is unable to pay salaries to its staff and adopting downsizing as a temporary measure. I have heard that around 100 employees laid off recently who were critical in terms of delivery too. good bye Warid

      • Muhammad Abrar Naeem

        This will happen only temporary. Look forward 5 years. No one will like to use 2G network , every one will prefer at least 3G network. For the time being Warid will survive on cheap call rates but eventually their revenues will start to squeeze. I am living in KSA , i have seen this situation when 3G and 4G were rolled out.

      • Majid

        Absolutely right, there are 70+ % users, specially in rural area, who just want clears voice and that’s it, and Warid would be best choice for them, if there towers rising there. So I think warid should forget about this 3G & 4G race, instead they should focus to extend their network to far boundaries.

  • Excellent analysis. Bolnay walay boltay rahain, PTA Zindabaad. I think there should be some article about expected tarriff as well.

    • ali

      PTA did nothing .. Just collected money by selling air…….
      we have no electricity but we are 3g 4g ready… :)

      Government is just focusing on the points where they can suck money.. either it is being collected from appraising kings or by killing innocent people or by information sharing….or by selling air..
      No focus on basic necessities required for the people of Pakistan….

      I will try to get 3g and also try to get electricity from it.

      • I agree, govt. should definitely produce electricity on priority. But I am happy that they at least delivered 3G. As life would have been more miserable without electricity and without 3G, we now have at least one.

      • Ryzvonusef

        Hmm, think of it this way, money from auction can be spent on Electricity generation!

        • ali

          or if already paid to someone offshore.????

      • Bijali

        Oh,,,there is shortage of electricity!!! Stop eating food, stop doing your daily routine work and also stop taking money from your employer……JiyoPakistani, Roo Roo kay Jiyo.
        Govt should have abolished PTA and assigned task of collection money to you Mr. Ali.

        • ali

          Bijali> bro you get me wrong.. I think you are unable to understand the problem of a ghreeb admi..same like our politicians.

          whom never crossed the river in rain bare footed with his bag of books on head can never be able to understand what would be required instantaneously to cross the river and study..

          can you define ghreeb admi of pakistan? i doubt you never…

          Moreover ur unaware perhaps someone near you stop eating food as he has no money no job, and you are unaware beco you are bz in using your 3g service or mobile.

          be realistic.. equality is necessity.

          • Bilal Iqbal

            what else can be done my dear.. a lot of things are in progress to overcome energy crises… yesterday, PM inaugurated new power project and many others are also under constructions.. but it doesn’t mean to stop other things.. every thing is necessary.. if some thing happens.. appreciate it and pray for others..

          • Bijali

            Ok if I accept this fact I have no idea about the suffering of *Poors* then you must also accept that you no idea about economics. Just for the sake we have shortage of electricity we should stop all projects that will boost national economy and eventually effect lives of entire nation including *Poors*. I really appreciate your concern for the Poors but nations are not run as an NGO, you have to look million other factors aswell.

            • ali

              An introduction to me will clear you what i know about economics..but..I will pray that you will remain unable to experience what i am saying and trying to realize. Ameen

              thanks.

      • Usman Ali

        good things do happen..
        you are saying about electricity
        well i say jese log wese hakim
        blaming government is useless, thats only thing we do in our country.
        i have more concerns about our beliefs, values culture religion etc and then basic necessities.

        • ali

          agreed !!!

  • jan pehchan

    4 operators, 4 licenses. Competition he competition. And whats ict forum pak? self styled experts? Any credibility? And when will we read about Moody’s analysis of the auction? I believe unbiased journalism warrants that. Anyways, https://www.moodys.com/research/Moodys-Spectrum-auction-results-are-credit-positive-for-Mobilink–PR_297829?WT.mc_id=NLTITLE_YYYYMMDD_PR_297829

  • AbdulBaqi1

    i think u missed the point about 4g frequencies used in other parts of the world.If our govt had sold 2600 mhz range spectrum some of these bandwidth problems might not been expected.Secondly you failed to mention what 4g china mobile is bringing to Pakistan? fdd 4g or tdd 4g?

  • Shahid Saleem

    Seems like everyone has forgotten Rueters article where they said the bidding was not as great as hoped. The end result is that we didn’t get the $2 Billion that the government told us to expect. Though we didn’t get the minimum bid either.

    • ali

      yes ur rt!!