PTA Rejects Majority of Telcos’ Recommendations for 3G/4G Spectrum Auction

Pakistan Telecommunication Authority (PTA) has rejected most of the demands of telecom stakeholders including withdrawal of different taxes, lifting restrictions on SIM count, offer of two lots each of 2×5 MHz spectrum for the Next Generation Mobile Services (NGMS) spectrum (3G) auction.

Auction Committee of PTA has prepared response to queries and comments on Information Memorandum and License Template which is shared as below;

Question: We suggest the withdrawal of 10% Advanced Income Tax on the assignment of spectrum, bringing back the import/customs/import duties to the level of 2013-14, and recognizing the long pending industry status/undertaking to the telecom sector. We also suggest withdrawal of withholding tax, sales tax and FED on usage of data services.

Answer: The successful bidder/licensee will have to follow laws of the land including payment of taxes/duties.

Q: After BVS, there is no reason to keep the restriction on number of SIMs. It is therefore, requested that the Government fulfils its commitment immediately and the industry be assured of no restrictions on SIM count.

Answer: Orders of the Honorable Supreme Court of Pakistan will have to be followed.

Q: It is suggested that instead of one lot of 2×10 MHz, the government should offer two lots each of 2×5 MHz spectrum and applicants may be allowed to participate for a minimum of 2×5 MHz of 850 MHz spectrum lot as was the case in 2014 auction of 2100 MHz frequency band.

Answer: The spectrum block has been defined in-line with the policy issued by MoIT dated 26 April, 2016 already available on PTA web site.

Question: The Licensee will ensure compliance with 3GPP standards and will have to take all possible measures while installing its network to ensure that the out-of-band emissions are under the permissible limits defined by ETSI, ANSI, ITU, IEC standards. However, in the case that other operators experience receiver blocking affect in their 900 MHz uplink band, they will have to deploy receiver filters on their cell sites. The responsibility of these mitigating measures must not be placed on 850 band licensee and the obligation on part of the licensee should be limited to compliance to the said standards only.

Answer: The purpose is to ensure that the network is properly optimized and there are no out of band emissions. Moreover, All the Licensees would be required on best effort basis to deploy filters in case interference is still observed after following the International standards. Following will be amended in the IM: Section 2.2.1 the following text

The licensee will have to take all possible measures while installing its network that ensures that there is no harmful interference to licensees operating in EGSM band. In case there is any interference experienced by neighboring EGSM operators’ licensee will have to make adjustments to its network for elimination of interference be replaced as under:

“The licensee shall ensure compliance with 3GPP standards and will have to take all possible measures while installing its network to ensure that the out-of-band emissions are under the permissible limits defined by ETSI, ANSI, ITU, IEC standards”.

Q: The spectrum being auctioned should be free of any interference from any unauthorized transmissions.

Answer: The spectrum has been cleared by Frequency Allocation Board and made available for auction. However if interference in electromagnetic environment exists it can be resolved through mutual coordination.

Q: Only new entrants should be liable to meet new rollout obligation. In case of an existing NGMS licensee acquiring the 850 spectrum, no new/additional rollout obligations should be imposed due to the fact that they are already subjected to NGMS rollout obligation. Any new obligations will create disparities that will be firstly, create unnecessary burden on the NGMS licensee, and secondly, create difficulties at the time of conducting the license framework review as per Telecommunication Policy 2015.

Answer: Following will be amended in the IM In section 2.3 of the IM the following text:

The rollout obligations vary depending on whether the Operator is an existing Cellular Mobile NGMS Operator or a New Entrant in the Cellular Mobile Market.

NGMSA Licensees that obtain rights to use 850 MHz spectrum shall provide the quality of service defined in its License within the geographic areas and meet the rollout schedule detailed in Table 3 below: will be replaced as under: The rollout obligations vary depending on whether the Operator is an existing Cellular Mobile NGMS Operator or a New Entrant in the Cellular Mobile Market.

NGMS Licensees that obtain rights to use 850 MHz spectrum, opt to deploy a technology which is not currently being deployed under other licenses issued to the NGMS licensee, shall provide the quality of service defined in its License within the geographic areas and meet the rollout schedule.

Q: The QoS parameters/KPIs should be the same as in case of the previous NGMS licenses for NGMS services.

Answer: Agreed. Following will be amended in the IM

Following text in Table 4 of the IM:

IM_Updated

Q: Any change in payment mechanism of Annual Spectrum Administrative Fee (ASAF) in light of Telecommunication Policy 2015 should be applied with the consent of the Licensee;

Answer: Any change in payment mechanism of Annual Spectrum Administrative Fee (ASAF) in light of Telecommunication Policy 2015 will be frame with industry consultation.

Question: The requirement of the performance bond for the purpose of roll out obligations should only be in case of a new entrant acquiring the license. In case of existing NGMS licensee, no additional performance bond should be required since they have already submitted the performance bond and achieved multiple milestones;

Answer: As per reply at serial (6) above. Performance bond obligation will be applicable for technologies not already deployed at the time of rollout/commencement of that technology.

Question: Licensee should be allowed to build/operate its own fiber and related infrastructure for providing NGMS services; Licensee should be allowed to offer cloud based services and undertake remote operation (core) to optimize use of the network elements and rationalize operational costs. It is worth mentioning that mostly cloud servers are based outside the territory of Pakistan; The licensee may be allowed to use its sale channels to authorize all activities connected with digital/data services including but not limited to dealing with online merchants; The licensee may be allowed to distribute TV and multimedia content and condition for major Pakistani shareholding need to be relaxed for NGMS licensee in order to allow distribution of permissible content;

Answer: The scope of the license has been clearly defined in license template which has been defined in light of current statutory provisions. However, the existing licensing framework is under review, keeping in view the technological advancements and shift in provision of telecom services, as per the requirements of Telecommunications Policy 2015.


  • TheXpert

    So they only bowed down on the point that benefited the general public, by reducing the minimum qos speed from 512kbps to 256 kbps.

    • Janbaaz

      How does it benefit the general public?

      • Mirza Moazzam Baig

        That’s sarcasm

  • Zafar Abbas Rizvi

    I bet nobody will buy this license

    • AbdulB1

      Yes specially after Panama , govt is weak and in desperate need of foreign exchange for next budget. It might be due to telecom companies belief that they can get better deal by exerting pressure on current govt or wait for the next govt.

  • Desi

    What can you expect from “Babus”

  • Zawyar Ur Rehman

    It looks as if the people who were taking a decision on these demands wanted to maximise the chances of worse 3G quality at all costs.
    Their plan : (just for fun)
    1. Firstly, try that the operators do not buy the spectrum at all.
    2. If they do buy it let em’ go as low as they want to in terms of Qos.

  • AbdulB1

    Orders of the Honorable Supreme Court of Pakistan will have to be followed…… lol when they can make a new law then supreme Court can’t do anything. This kind of thing also happened with graduates of Chinese universities who’s graduates didn’t had to appear in pmdc License exam but Parliament passed a new law and Court couldn’t do anything.

  • Alam

    Absurd! Asking PTA to make commitments on issues and decisions within the jurisdiction of FAB and tax authorities. PTA cannot support the industry on tax issues. It is itself a taxpayer and victim of FBR’s coercive tax collection measures. Why ask questions that you know for sure will not be responded/obliged. May be it was tactical move, to show that PTA – government – was not accommodating the industry and thus get another justification for not bidding.