Telecommunication technology: New base price to be set for 3G auction

Oversight committee will also be formed to ensure transparency.

ISLAMABAD:

In two equally significant moves, the government has decided to determine a fresh base price for auction of 3G spectrum licences and constitute an independent oversight committee to allay increasing transparency concerns in about a billion-dollar deal.

The new base price for the 3G licence will be determined by a consultant of international repute that will be hired soon through an advertisement, according to sources in the Ministry of Information Technology.

Prime Minister Raja Pervez Ashraf has already issued directives for publishing advertisements for hiring the consultant, who will design the auction programme.

Earlier, the Pakistan Telecommunication Authority (PTA) had set the base price at $210 million for the 3G licence with bid earnest money of $31.5 million without hiring a consultant. By this account, the total base price of three licences stood at $630 million while the government expected to fetch a maximum $900 million to $1 billion.

However, information technology experts and parliamentary panels on IT termed the value too low, arguing that the auction could earn at least $2 to $3 billion keeping in view the country’s population.

Senator Pervez Rasheed, the spokesman for the PML-N, had also questioned the transparency of 3G auction by pointing out in a Senate session that the $210 million base price was much lower than $290 million fixed for 2G licence.

The sources said the premier has given a four-month deadline to complete the transaction, which was originally planned to be completed by March this year. The process of 3G auction had started in November 2011 and then prime minister Yousaf Raza Gilani had also given a four-month deadline.

According to the sources, the government has decided to form an oversight committee that will work as a watchdog to monitor the consultant and PTA to ensure transparency. They added the government will soon issue a notification in this regard. The committee will comprise one member each from the media, civil society and Transparency International Pakistan.

Terms of reference of the committee are not immediately clear. It is also not clear whether its members will be allowed to sit in meetings of the Auction Supervisory Committee (ASC), headed by Finance Minister Dr Abdul Hafeez Shaikh. The ASC was also constituted to ensure transparency and take the auction process forward in a coordinated way.

The ASC, having three economic ministers as its members, struggled a lot last fiscal year to keep the transaction on track. But despite all efforts it could not ensure transparency and lately the government had to start the whole process from scratch.

Published in The Express Tribune, July 29^th, 2012.