Ministry of Information Technology and Telecommunication (IT&T) has initiated the process of auctioning the remaining spectrum (4G) and planning to auction it by end March 2017, it is learnt.
Ministry of Information Technology and Telecommunication (IT&T) spokesperson revealed that the process for auctioning the remaining spectrum has been initiated. File has been sent to Prime Minister Office seeking approval for constitution of Auction Supervisory committee which will determine the base price, he added.
However, background discussion with industry stakeholders revealed that uncertainty prevails in the market due to heavy estimated price and low demand.
The government had budgeted Rs 65 billion from the auction of two licenses of 3G and 4G for 2015-16. However, later government revised it to Rs 45 billion, while deciding to go for single frequency spectrum auction in the 850 MHz band with base price of $395 million. One license (4G) remained unsold and the government has budgeted Rs 75 billion for the current financial year from its auction.
Finance Minister Ishaq Dar earlier this month stated that national exchequer earned Rs160 billion through five transparent auctions of telecom spectrums, adding that the earning from the spectrum is expected to reach to Rs200 billion with one more auction still to be held.
IT&T Ministry and Pakistan Telecommunication Authority (PTA) have expressed ignorance about the budgeted amount while saying that they have no say in the budgeted amount, as they were not taken on board in this regard.
PTA officials expressed ignorance while saying, “The last 4G license was sold in around Rs 25 billion. How the government budgeted Rs 75 billion, they do not know”.
PTA officials confirmed that spectrum is available and they would go for the auction, once the directive is received. Further this time PTA would not require to hire the services of consultant as the market study has already been done by the last consultant.
The number of 3G and 4G users in Pakistan reached 37.57 million by end December 2016 against 36.41 million by November. PTA data shows that the number of 3G/4G subscribers increased in the country from 29 million in 2015-2016 to over 37 million by end December i.e. 8 million in last six months. The upcoming spectrum will depend on the number of subscribers and data usage as it would determine the market appetite for additional spectrum.
The government last year approved telecommunication policy with the objective to improve the sector’s efficiency and service delivery but refused to give the status of industry, which it desperately needs to get relief from heavy taxes, officials added.
The situation became further worse for the government after the Mobilink-Warid merger. Except Ufone, other operators including Mobilink, Zong and Telenor have already 4G licenses. They would participate in the upcoming 4G license, if require additional spectrum.