Renewal of telecom licences may be further delayed

Disagreement between frequency board, IT ministry creates obstacles

Zafar Bhutta April 13, 2019
FAB’s objections created roadblocks in getting the already delayed process finalised and have jeopardised $1.3 billion in revenues. PHOTO: FILE

ISLAMABAD: The Frequency Allocation Board (FAB) and the Ministry of Information Technology (IT) are engaged in a row over the renewal of licences of telecom companies, which may lead to further delay in the process.

FAB has opposed the involvement of the IT ministry in the entire process, saying it is solely the mandate of the Pakistan Telecommunication Authority (PTA).

FAB, created by the government of Pakistan, analyses and assigns radio spectrum to intended wireless users in the country.

The licences of three telecom operators, Jazz (Warid), Telenor and Zong are expiring next month. “While the renewal terms should have been shared more than two years ago under the licence agreements, the inter-departmental conflicts in the government made it difficult to achieve the goal,” said an official.

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While preliminary work has been completed and recommendations have been gathered from all stakeholders, the ministry only requires the cabinet’s nod to press ahead with the process and complete it by the deadline.

However, FAB’s objections created roadblocks in getting the already delayed process finalised and have jeopardised not only $1.3 billion in revenues for the government, but have also created uncertainty for the telecom operators and other foreign investors in the country.

According to documents available with The Express Tribune, FAB officials informed Prime Minister Imran Khan in a high-level meeting on April 1 that regulatory inconsistencies in the renewal of licences of mobile companies needed to be fixed to achieve revenues of $1.3 billion.

When the prime minister inquired about the revenue collection through the renewal of licences in an auction, FAB officials said the auction could be possible if the companies were intimated three years in advance. It could be achieved if the licences were due for renewal in 2022.

They said the law ministry had supported the FAB’s viewpoint on the “illegal constitution” of technical committees by the IT ministry. In order to expedite the process, the PM had ordered the constitution of a ministerial committee to oversee the work of a technical committee last year in order to come up with the renewal proposal.

The technical committee consisted of relevant government stakeholders, which after much deliberation, came up with a comprehensive proposal for the cabinet’s approval.

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However, the FAB raised objections over the work of the technical committee. According to the Pakistan Telecom Act 1996, the IT ministry can give policy direction to the Pakistan Telecommunication Authority (PTA) and hence committee formation is in line with the appropriate procedure.

FAB, however, has insisted that the setting up of the committee is illegal despite the fact that the proposal reflects FAB’s recommendations for the renewal price and terms.

Industry officials say despite the reservations of telecom operators, the FAB is pushing for a higher renewal price. It is also suggesting the holding of auction for renewal of licences in 2022 instead of administrative allocation.

Published in The Express Tribune, April 13th, 2019.

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