Auction to be web-based and use SMRA mechanism. DESIGN: CREATIVE COMMONS
The Pakistan Telecommunication Authority (PTA) has issued a unique plan for the much awaited auction of 3G and 4G spectrums on April 23.
“In order to ensure transparency, the auction will be web-based and will not require the physical presence of the four cellular mobile operators (CMOs) participating in the bidding process,” PTA Chairman Syed Ismail Shah told reporters on Saturday. “All four CMOs have been allotted different colours for taking part in the auction.” he said.
The auction will also be carried out under the Simultaneous Multiple Round Ascending (SMRA) mechanism which Shah termed the ‘preferred mechanism for conducting a modern auction’.
Under the SMRA mechanism, all lots are auctioned simultaneously over a series of rounds. Bids are submitted on individual lots at the announced prices in each round, at the end of which a standing high bidder is identified for each lot.
The standing high bidder is committed to the lot and cannot withdraw – he is only released when outbid by another bidder. When a lot receives at least one bid, the price for the lot increases in the next round.
According to the PTA chairman, the SMRA mechanism is preferred over the traditional ‘open cry out’ auction model since it provide both the auctioneer and the bidder the flexibility to simultaneously bid on lots of their choice, and the privacy and time to make educated decisions.
“This is not a new practice… some of the recent auctions conducted in the United States, Sweden, Norway, Hong Kong and Canada were all based on the SMRA model,” he said.
Outlining other features of the auction, Shah said offering the spectrum in different bands allows the government to maximise revenue generated from the bidders and ensure more than $1 billion were invested in Pakistan’s economy. He stressed, however, that the real target of the auction was to introduce modern technology in the country.
Talking about insurance measures, the PTA chairman said that in case any successful bidder refused the licence for the 3G or 4G spectrum, PTA would seize 15% of the bid money deposited and impose a heavy penalty.
According to Shah, the country has lost at least $500 million due to undue delays in auctioning the 3G spectrum as the technology was introduced around 10 years back. Since then, it has been deployed in 203 countries.
Although 4G technology has been deployed in 101 countries as well, the PTA chairman said Pakistan could yet be able to compete with them since 4G services were at an initial stage in those nations.
It is hoped that next generation mobile services will enable higher GDP growth and introduce more innovative e-services, such as E-medicine and E-education. The deployment of 4G technologies will also provide our engineers and technician opportunities to acquire the latest skills and become competitive in the international market.
The successful auction of 3G and 4G spectrums is expected to create more than 900,000 jobs in the country’s telecom sector as well.
Published in The Express Tribune, April 20th, 2014.
COMMENTS (8)
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I think this is going to be a transparent auction process. PTA trying its level best to make process a success. Web based auction is adopted by most of the developed countries in the world. welcome 3G&4G.
good work 3g is a blessing.I am desperately waiting for it.
EXCELLENT move to launch 3g.we all want.our country wants. Good initiatives taken by Mr Shah and his team. Its good to know that auction will be web based. This shows that auction will be transparent and fair for all companies taking part in it.
Now i can say that 3G&4G will come to Pakistan as auction is going to be held. Using SMRA mechanism auction will be fair.
Good initiatives taken by Mr Shah and his team. Its good to know that auction will be web based. This shows that auction will be transparent and fair for all companies taking part in it.
In SMRA auction mechanism every license is up for bidding at the same time. Participants may bid on multiple licenses at once. All licenses will continue to be for sale until there are none left or there are no buyers. It is the oldest and most well established auction format, and is relatively easy to understand.
from this blueprint its clear now that the auction is held on time mean now its time for 3G and 4G, and one thing more, Pakistan has set base prices of the spectrums not much higher than India’s or it could affect the roll out process.
To restore the confidence of cellular companies a great step from the PTA would be to liberalize the telecom sector. Undue bans on the night packages etc are a huge loss on revenue which serves as a discouragement for further investment. Morality is not the domain of PTA or the government. Similarly the imposition of filter on Internet has greatly reduced its speed. How would 3G or 4G work on slow internet ?