3G spectrum auction

It may be too early to begin comparing the Nawaz Administration with its predecessor, but on at least one front, the government appears to be doing much better than its forebears: the auction of next generation telecommunications spectrum. First came the decision not to restrict licences to just third-generation technology and also to allow new players to enter the market. And now we learn that the government has finally completed its selection of a consultant to oversee the auction process, which should help speed up the process significantly. The government appears to be making all the right moves in this process so far. We only hope it does not fall prey to mistakes now.

Most experts believe that, given the rapid pace of technological change, it no longer makes sense for Pakistan to consider 3G technology and the country should jump straight to 4G. The government’s decision in October effectively created the legal framework to allow that to happen. What is critical now is for the process to conclude quickly so that the necessary investments in technological upgrades can be made as soon as possible.

What stands in the way now is the government’s desire to make the auction into a money-spinner for its fiscal needs. Government officials have been quoting the figure of $1.2 billion as the amount they are looking to raise from auctioning licences. While we agree that the government should be able to generate revenue from this opportunity, the focus should be less on the revenues for this year and more on the growth prospects of the mobile telecommunications industry as a whole.

The industry serves the overwhelming majority of Pakistanis, providing them with cheap services and connecting them not just to one another, but to the entire global pool of information that is the internet. It is also one of the largest taxpayers and one of the largest sources of foreign direct investment. At a time when our regional peers are rapidly leaving us behind, it is imperative that Pakistan adopt 4G technology as quickly as possible.

Published in The Express Tribune, November 30^th, 2013.

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