3G licence auction delayed indefinitely: Operators

Published: April 27, 2012

Government postpones auction indefinitely until international consultant is hired to supervise the process.

DUBAI:  Pakistan has indefinitely delayed an auction to sell third-generation (3G) mobile telecoms licences, two operators told Reuters, which if completed would have raised a minimum of $630 million for the cash-strapped country.

The auction of three 3G licences had been scheduled to be held on March 29, according to a January government memorandum, and would be open to the five existing mobile operators plus potential new entrants.

Potential bidders were due to submit expressions of interest from January 21, but they have yet not been invited to do so, Walid Irshaid, chief executive of Pakistan Telecommunication Co (PTCL), told Reuters.

“All the dates announced earlier have been put on hold, what the new date is we don’t know,” said Irshaid. “The first step was not even taken yet. No official notification has been received by us or any other operator.”

Former monopoly PTCL, an affiliate of United Arab Emirates’ Etisalat, is the third-ranked mobile operator, with a 19% market share, behind Norway’s Telenor and Mobilink, a unit of Egypt’s Orascom Telecom, which respectively claim 25 and 30% of Pakistan’s 116 million mobile subscribers.

A spokesperson for Telenor said the government had postponed the auction indefinitely until it hires an international consultant to supervise the process.

The Pakistan Telecommunication Authority, which is running the auction, was not immediately available for comment.

The government, which is still owed $800 million by Etisalat as part of the UAE firm’s $2.6 billion acquisition of a 26% stake in PTCL in 2006, expects to raise at least $630 million from the 3G auction, having set a base price of $210 million for each licence.

That would have raised much-needed money for Pakistan’s government, which battling doubled-digit inflation and a sharply widening trade deficit, while foreign investment into the country has also plunged.

Pakistan’s two other mobile operators are Warid Telecom – a joint venture between Abu Dhabi Group and SingTel Group – and China Mobile Communication Cooperation’s Zong.

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