Govt Committee to Finalize License Renewal Policy for Telcos

Prime Minister Imran Khan has constituted a technical committee to evaluate benchmarks for the license renewal of three Mobile operators and award of additional spectrum. The government is expecting to generate $1-2 billion in revenue from the process.

Official sources revealed that license renewal of two mobile operators is due in early May 2019 and one more license renewal is expected in October. The government is yet to come up with any policy guidelines in this regard which is resulting in uncertainty in the industry.

The technical committee is headed by Secretary Ministry of Information Technology and Telecommunication (MoITT) while officials from Pakistan Telecommunication Authority (PTA), Ministry of Finance, Law and Justice and Frequency Allocation Board (FAB) are the members of the body.

The committee was formulated after the consultant hired by PTA failed to complete its assessment on time, due to the reported differences among PTA, FAB and IT Ministry.

The technical committee has been tasked to evaluate benchmarks, different models, legal and financial aspects and submit recommendations to the committee of ministers—comprising on Finance and IT ministers. After the approval from the committee of ministers, a final draft will be submitted to the federal cabinet for approval of the policy before the IT Ministry announces it.

Sources said that due to delay in license renewal policy, telecom operators will have little time to make decisions about future investments and business plans.

According to experts, renewal decisions should ideally be finalized 18-24 months prior to license expiry to ensure service and business continuity.

The license of Telenor Pakistan and Jazz is due to expire in May 2019, and according to telecom experts, the operators may face operational issues if they fail to renew the licenses within the due time.

The license of Zong is due to expire in October 2019. All the three operators have submitted requests for renewal but the decision on renewal is still pending.

The licenses of the three cellular mobile operators were awarded by PTA under the cellular mobile policy for a period of 15 years in 2004.

Two operators – Mobilink and Ufone – have renewed their license at $291 million in the past after the expiry of the 15 year period. The two mobile operators are not due for a renewal until 2022 and 2029 respectively.

Sources said that efficient completion of the renewal process will help maintain certainty in the industry. However, it depends on the new framework of the licenses regime by the telecom authority especially after the licenses and spectrum of 3G/ 4G technologies are awarded to various operators.

Clause 8.11 of Telecommunications Policy 2015 states that “Renewal of license and associated spectrum at the end of a license period will be as per the policy of the government. PTA will in timely manner initiate the process in accordance with terms and conditions of the license.”

In case the renewal of licenses PTA will make recommendations to the federal government (MoIT), within the timelines stipulated in the respective licenses. Other spectrum, not subject to license renewal terms, will be priced in accordance with the applicable spectrum pricing methods specified. Where spectrum payments for microwave and mobile spectrum have been introduced, subsequent to the initial assignment of mobile spectrum, the spectrum fees associated with the mobile spectrum will be determined under the terms of the applicable license.

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