Going, going…: PTA postpones 3G licence auction

Regulator could not get cabinet clearance to avoid competitive bidding rules.

ISLAMABAD:

Pakistan Telecommunication Authority (PTA) has put off the much-trumpeted auction of 3G spectrum licence following failure to get clearance from the cabinet to ignore competitive bidding rules in a bid to complete the process on schedule.

“The current schedule of mobile cellular auction is under review. Fresh dates will be posted in due course of time,” read a brief statement posted on Thursday on the website of PTA – the telecom regulator that was assigned the task to complete the auction process by the end of March.

Along with 3G, the auction of Instaphone licence has also been postponed and fresh dates have not been announced.

The PTA move came just a day before the end of the deadline for submitting expressions of interest for three 3G (Third Generation) licences.

PTA had set March 26 for the auction of Instaphone licence while for 3G auction the date was March 29.

Finance Minister Dr Abdul Hafeez Shaikh had launched the auction schedule on January 20 in his capacity as chairman of the Auction Supervisory Committee (ASC).

Parliamentary panels have already raised questions over the transparency in the auction process. And the postponement is also in violation of directives given by the Cabinet Committee on 3G Auction.

In its last meeting on February 24, the committee told PTA that “the process must be conducted as per policy directives of December 19 and the auction be carried out in two to three months”.

In addition to this, if the licences are not sold this fiscal year ending June 30, the government will find it difficult to restrict its budget deficit, which will increase by 0.35 per cent or Rs75 billion, the target amount for 3G auction.

The first sign of missing the deadline emerged when PTA invited applications for hiring an international consultant by March 26 – just two days before the first auction of Instaphone licence.

The applications were invited quite late as PTA had completed three-fourth of the required work, said an official of the finance ministry. However, PTA alone cannot be blamed for the delay.

According to official documents, ASC committee chairman Dr Abdul Hafeez Shaikh had on January 6 endorsed the PTA proposal to auction the licence without hiring any consultant.

However, industry people later advised the PTA chairman not to take any responsibility and follow the set procedure to ensure transparency, said one of the three people who were informally approached by the PTA chairman to seek advice.

“Neither the government nor the regulator met requirements to ensure transparency that eventually led to the delay in auction,” said the industry expert on condition of anonymity.

Though PTA Chairman Dr Muhammad Yaseen invited applications to hire a consultant, at the same time he made few attempts to seek the cabinet and prime minister’s nod for exemption from Public Procurement Regulatory Authority (PPRA) rules to directly appoint a consultant.

Despite repeated attempts, the PTA chairman was not available for comments.

Later, in a last ditch effort, the PTA chairman tried to invoke the emergency clause of PPRA rules, but he could not succeed in this too and was left with no option but to postpone the auction.

Published in The Express Tribune, March 9^th, 2012.