Technical Committee Submits Recommendations for Telco License Renewals

The technical committee constituted by Prime Minister Imran Khan has recommended the same price, as last auctioned spectrum, and payment terms for the license renewal of Mobile operators.

The technical committee headed by Secretary Ministry of Information Technology and Telecommunication (MoITT) for price and evaluation of benchmarks for the license renewal of three mobile operators and award of the additional spectrum has completed its report and submitted to the committee of ministers — comprising of Finance and IT ministers.

After the approval of the committee of ministers, the MoITT will prepare a summary for the upcoming Cabinet meeting, likely to be held on Tuesday, to seek final approval and after which the policy would be unveiled.

The license renewal of two mobile operators is due in May 2019 and one in October. The government is yet to come up with policy guidelines in this regard which is resulting in uncertainty in the industry.

Sources revealed that the technical committee has maintained the price of $291 million for 10 MHz block in 1800 MHz band (same as Jazz won in 2017) and $395 million for 10 MHz block in 850 MHz band (same price of Telenor won in 2016). Furthermore, the payment terms would remain the same as the previous auction.

However, the committee has recommended Pakistan Telecommunication Authority to upgrade quality/standards as per the best international practices, sources maintained.

Sources said that due to delay in the announcement of the license renewal policy, telecom operators would have little time for decisions about future investment and business plans, which is creating uncertainty in the industry.

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 (Warid) are due to expire early in May 2019 while the license of Zong is due to expire in October 2019.

Sources further said that Zong is still facing network interference in their uplink GSM 900 MHz band due to the cross-border spillover from Indian CDMA operators. Frequency Allocation Board assigned the compensatory band to Zong on a temporary basis but a permanent solution is yet to be devised.

In such situation, the spectrum holdings in 900 MHz and 1800 MHz band have to be rationalized for proper carrier planning that requires proper policy plan and the operator may be compensated which could change the revenue figure of $1.3 billion–estimated by the government.

  • Detailed comments can be given after receiving the recommendations of the Technical Committee. On the face of it, the committee has not done its home work properly and has maintained the level at Year 2007. Band wise pricing mechanism should have been devised in the best interest of customers, investors and our country.

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