PTA Receives Rs. 15.82 Billion Against Second Installment Of License Renewal Fee

Pakistan Telecommunication Authority (PTA) has received Rs 15.82 billion (the equivalent of USD 103.17 million) against the second installment of license renewal fee from two Cellular Mobile Operators (CMOs); Telenor Pakistan and Pakistan Mobile Communication Ltd. (Jazz).

The amount is being deposited in Federal Consolidated Fund (FCF) as per practice under Pakistan Telecom Re-organization Act 1996, said PTA in an official handout.

PTA has so far deposited Rs 135.81 billion (the equivalent of USD 862.22 million) with the government, received against 50 percent of the total license renewal fee and first installment of the same from three CMOs. With the amount of the second installment received from two CMOs now, the total receipts on this count have become Rs 151.63 billion (USD 965.39 million). The second license renewal fee installment of CMPAK (ZONG) for USD 54.086 is due in October 2021.

The government had earlier received $238.6 million (Rs 37.16 billion) as non-tax revenue from China Mobile (CM Pak) cellular company as a license renewal fee. Telenor Pakistan and Jazz had deposited $224.6 million (Rs 35.262 billion) each (half of the amount as per court direction) as their license renewal fee in September 2019.

The government had approved the renewal of licenses of two mobile operators, i.e., Jazz and Telenor Pakistan, at around $450 million each while the third operator – CM Pak, has to pay $470 million. Due to the stay orders by the Islamabad High Court, the collection of the renewal fee from two telecom companies had been delayed.

Cellular licenses were issued by the PTA to two new cellular mobile operators, i.e., M/s Telenor Pakistan, and M/s Warid Telecom, on May 26, 2004, for 15 years, under the Mobile Cellular Policy, 2004, on payment of $291 million after the auction.

The cellular license of M/s Paktel Limited, now China Mobile Pakistan (Zong), was also renewed by PTA under the 2004 Policy on October 23, 2004, for 15 years on payment of $ 291 million. These licenses were due for renewal on May 25, 2019, and October 22, 2019, respectively. In 2014, the government of Pakistan renewed the license of Ufone at $291 million.

On August 21, Islamabad High Court (IHC) directed Telenor and Jazz for depositing 50 percent of the license renewal fee, i.e., around Rs 36 billion each in two weeks as a guarantee.

The operators disagreed with the PTA decision on fixing the license renewal fee. The operators had also requested for grant of stay order to avoid service disruption in the country after August 21, 2019 – the date fixed by PTA for renewal of licenses.

The court had directed both the operators to deposit half of the amount, i.e., 50 percent, as a guarantee till the final decision on the appeal of both cellular operators.

PTA had rejected mobile operators’ apprehensions relating to the price of license renewal and passed an order while fixing the fee for license renewal at $39.5 million per MHz for frequency spectrum of 900 MHz and $29.5 million per MHz for frequency spectrum of 1800 MHz. However, Jazz and Telenor went into appeal against the PTA decision.

The authority had directed operators to pay their license fee before August 21, 2019, or their licenses will be termed expired, and they will not be allowed to provide telecom services after the deadline.

Mobile licenses of Telenor and Jazz expired on May 26, 2019.