Govt Still Hasn’t Decided on Telcos’ License Renewals & Sale of Additional Spectrum

The government is facing a catch-22 situation with respect to license renewal of three mobile operators and auction of additional spectrum.

The license renewal of two mobile operators is due in early May 2019 while the other one is in October 2019. The government is expecting to generate $1-2 billion in revenue from the renewal of licenses and by awarding the additional spectrum.

However, the government is yet to come up with any policy guidelines in this regard which is resulting in uncertainty in the industry.

In order to ensure adequate proliferation of telecommunication services across the country, the mobile communications licenses include minimum rollout obligations to be met by the licensees within the given time frame. Beyond license conditions, CMOs expand networks depending upon market demand, business cases, population and revenue etc.

As far as the provision of services at a particular location in addition to the roll-out obligations is concerned, the licensees make such decisions after comprehensive commercial feasibility analysis.

Official sources say that the government is considering amending mobile service obligations, key performance indicators (KPIs) as well as quality standard benchmarks in the upcoming license renewal of mobile operators and award of additional spectrum.

However, according to officials, the government is facing indecisiveness due to some technical as well as financial hurdles.

Member (Compliance & Enforcement) Dr Khawar Siddique Khokhar recently stated that rollout obligations are likely to be changed. Other quality indicators are also likely to be changed for the renewed licenses.

It is a fact that rollout obligations, quality standards and performance indicator benchmarks were relaxed in the license conditions renewed earlier. But if the government changes these conditions, it is difficult to understand how three mobile operators would work with one type of standards while the remaining two work with the older standards. However, if the government does not change these standards/obligations, it is feared that telecom services/facilities may be compromised.

According to official documents, rollout obligations as per the renewed license 2014, are as under

(i) 100 percent Tehsil Headquarters in Punjab and Sindh,

(ii) 90 percent Tehsil HQs in Khyber Pakhtunkhwa

(iii) 50 percent Tehsil HQs in Balochistan and FATA

The government also has to set the license renewal fee. Some operators have requested the government to renew the license at the same price i.e. $291 million, with 10 percent upfront and 15 interest-free installments. However, the government is yet to reach any decision in this regard.

Some of the unserved and under-served areas in Balochistan as well as South Waziristan and Kurram districts of Khyber Pakhtunkhwa still lack access to basic telephony and mobile broadband services.

Furthermore, there are many issues where signals/service quality is not up to the mark and parliamentarians raise these issues in the National Assembly as well Senate Standing Committees on a routine basis.

It has also been reported by a few operators that due to security concerns the sites are temporarily turned off in compliance with directives issued by law enforcement agencies.

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