Spectrum auction: Telcos demand more than is available, says PTA

'We have received bids for 3G and 4G spectrum and demand has exceeded supply,' says PTA Chairman Dr Ismail Shah.

KARACHI:

With bidding telecom operators demanding more spectrum than what is available for sale, Pakistan Telecommunication Authority (PTA) is likely to conclude the auction for next-generation mobile internet services in the second round.

“We have received bids for 3G and 4G spectrum and the demand has exceeded the supply,” PTA Chairman Dr Ismail Shah told The Express Tribune, without giving further details.

PTA has put 30 megahertz (MHz) of spectrum in 3G or 2100MHz band and another 20MHz of spectrum in 4G or 1800MHz band on sale. The auction is slated for April 23.

Four telecom operators, Mobilink, Telenor Pakistan, Ufone and Zong, submitted their bids on Monday. The response was positive, according to Shah, as the four operators demanded more spectrum than what was announced for auction. The much-delayed spectrum auction was on the national press’ radar once again on Tuesday when Reuters reported that Islamabad would raise no more than $850 million from the auction because of scant interest by operators.

The report, which quoted an unnamed official from the finance ministry, said the finance minister was considering calling off the auction as no new operator bid for the spectrum while there was apparently no competition among the existing players.

A telecom regulator issued an official rebuttal to the said report and PTA spokesperson Khurram Mehran denied the story as incorrect. The response from four existing cellular mobile operators was very encouraging and satisfactory, he said.

According to Reuters, none of the operators had bid for 4G spectrum. The PTA’s chairman, however, confirmed that they received bids for 4G band as well. Additionally, it was reported that Mobilink and Zong bid for 10 MHz while Telenor and Ufone both bid for 5 MHz

“We have not yet offered the 5MHz slot to the bidders,” clarified Dr Shah. “We may do this later if we are sure the whole spectrum will be sold and the demand exceeds supply.”

The report quoted a finance ministry official as saying, “The base price for 10 MHz block is $291 million.” The base price for 10MHz block in 3G band, however, is $295 million.

Published in The Express Tribune, April 16^th, 2014.