Govt to auction 3G licences by mid-April

ISLAMABAD: Prime Minister Nawaz Sharif has cleared a plan to auction licences to run third- and fourth-generation cell phone networks by the middle of April, Finance Minister Ishaq Dar announced on Friday.

Islamabad expects to raise at least $1.6 billion through the spectrum auction.

The government has set a minimum price of $295 million for each 3G licence and $210 million for each 4G licence, the minister told a news conference.

The government, according to Dar, is willing to entertain new entrants so long as they acquire a GSM licence worth $291 million in order to take part in the bid for the two bands.

According to the finance minister, the accumulative minimum value of six licences is $1.6 billion, which is better than the initial estimates of $1.2 billion. Dar explained the minimum price will be the starting price for the bid.

Highlighting details of auction, Dar said, the government would be looking for full payment in advance, or a 50% payment with the rest to be paid in five equal installments over five years. But, unlike the past, the bidder will have to pay an interest rate equal to London Interbank Offered Rate with an additional 3%, he added.

The telecom companies had urged the government to set realistic minimum bid price and also set easy payment terms.

While admitting that precious time had been lost in auctioning of the future generation spectrum licenses, Dar said countries like Afghanistan and India were ahead of Pakistan.

Expressing hope, the finance minister said the provision of new services will help create more jobs in the country.

Dar said the successful culmination of the auction process will ensure rapid availability of high-end and new generation of information and communication technologies in the country that would promote connectivity.

He assured that the government will not compromise on transparency during the process. Dar announced that Information Memorandum will be made public on Monday and the auction process will be completed by April 15.

Responding to a question, the finance minister said the only way to prevent collusion of the existing five mobile cellular service providers was the entry of at least one new player in the market. He said Qatar has already shown interest to participate in the process.

Meanwhile, the Minister of State for Information Anusha Rehman is also expected to meet the owners of Turkish companies in an attempt to persuade them to take part in the auction process.

The finance minister said the reserve price and other terms of the auction have been devised by M/s Value Partner Management Consulting Limited, which has vast experience in designing IM for the auction of the spectrums.

The 3G licences will be offered for 10MHz in 2100 MHz band while the 4G will be offered for 10 MHz in1800 MHz, said Dar. He said all the licences have been offered for a period of 15 years with a provision of renewal of the term. However, the telecom companies have demanded a 20-year term.


Published in The Express Tribune, February 22^nd, 2014.