Next-generation licence: Govt raises over $1.1 billion in spectrum auction

ISLAMABAD:
The long awaited auction of Pakistan’s digital spectrum stayed on track after sale of 3G and 4G licences raised over $1.1 billion in the auction on Wednesday, opening the door for next-generation communication technology in the country. Though disappointingly, only one 4G licences was bought.

All the four local telecom companies, who had qualified for the economy, managed to win a slice of 3G spectrum (2100 MHz) pie put on offer. Zong though managed to claim one of the two 4G licences (1800 MHz each).

Zong was the highest bidder in the 3G auciton, claiming a 10 MHz 3G band licence, qualifying for the 4G licence.

Mobilink bagged the other 10 MHz 3G licence on the auction block. It did not bid for the 4G licence.

Ufone, which had initially bid for the 15 MHz of 3G band, got 5 Mhz band of 3G. However, due to the way it initially bid, it was disqualified for the 4G licence bid.

Telenor Pakistan won a 5 MHz 3G licence.

The government managed to raise $902.8 million from the 3G auction and another $210 million from the 4G licence auction.

Talking to media after the auction, Finance Minister Ishaq Dar said that the remaining licence in the 1800 MHz band and one license reserved for new entrants will be sold in the coming months, which would fetch additional income.

If sold, the total money raised from the spectrum auction will cross the expected revenue target of $1.3 billion.

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End of live updates

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8:30pm

The winners for the 3G and 4G spectrum auction have been announced.

Zong won 10Mhz for the 3G spectrum and 10Mhz for the 4G spectrum, while Mobilink won 10Mhz for the 3G spectrum. Ufone and Telenor both won 5Mhz for the 3G spectrum.

Ufone's CEO Abdul Aziz said that they had been pushing for 3G technology for a while now and that they were happy the auction had had a positive result.

8:17pm

8:00pm

Safe to assume that all four operators have managed to win one of the offered bands of 3G.

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6:50pm

There are unconfirmed reports that one 4G licence might be sold today as well.

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6:40pm

No new bids were placed in Round 7. Round 8 will be conducted shortly, after which Finance Minister Ishaq Dar will address the media at around 7:30pm.



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6:00pm

Round 7 has reportedly been delayed. Results are expected to be updated at around 6:15pm.

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5:50pm

There is confusion about whether the auction will go on to day two or will conclude today.

According to a top PTA official, if no new bids are placed at the end of the Round 7, the PTA will announce the results for both 3G and 4G today.

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5:10pm

The figures remain unchanged at the end of Round 6.

According to DG Commercial Affairs PTA Dr Mohammad Saleem, if no new bids are placed for three rounds, the PTA may conclude the auction.

“60 percent to 70 percent of the auction process is complete,” he added.

Colin Brooks, associate partner with Value Partners Management Consulting Limited, one of the firms consulting the PTA, said that the auction was transparent, efficient and timely, and will probably meet its intended target.

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4:35pm

3:55pm

According to the PTA website, the results have not changed after Round 5.



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2:55pm

Round 5 results are expected at 3:45pm.

The market talk is that the PTA is looking good for $1.3 billion.

With free tea and snacks available at the event, the atmosphere at the auction is festive and the PTA chairperson looks upbeat as he mingles with the attendees.

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2:45pm

Round 4 saw bidding only for Block A, in which the bid increased by $6.02 million.

This brings the total bid of all four blocks at end of Round 4 to $902.82 million, a total increase of $17.82 million from Round 1.



There is still no interest shown in Blocks B and C.

Considering how slowly the auction is moving, it might go on for another day.

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2:30pm

According to an information and communications technology (ICT) expert, the auction is going according to PTA's expectations and the government is likely to generate revenue between $1.2 billion and $1.5 billion.

The expert added that currently the operators are bidding on 10MHz blocks (A and D) and once the the companies feel they could lose out in the bid, they will then switch to the 5MHz blocks (B and C) which have not shown any change throughout the three rounds.

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2:12pm

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2:07pm

PTA chairperson while speaking to The Express Tribune said he is hopeful that the government will raise at least $1.1 billion from the auction.

The telecommunication officials also said that the auction may be extended till tomorrow or even day after it.

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2:00pm

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1:55pm

The results of the spectrum auction will determine whether or not the auction was a success. But for PTA this is a big test – after all this is the job PTA’s chief and his team were trusted with by the finance ministry.

In his budget speech for fiscal 2014, Finance Minister Ishaq Dar had set a target of $1.2 billion under non-tax revenues, which was supposed to be earned from the auction of 3G licences.

Dar went one step further in January this year and said the government was expecting to raise $2 billion from the auction, which was later reduced to $1.3m after the absence of any new entrant.

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1:47pm

The fourth round of bidding is underway and the results are expected around 2pm.


4G technology has already been deployed in 101 countries.

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1:25pm

In the third round, PTA received a total bid of $896.8 million. The bid for lot A increased by $5.9 million. The results can be viewed below:

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1:15pm

If one of the four bidders - who are each bidding for four blocks - bids higher on a second block, they will get that too. This means that one company can lose out in the auction.

Therefore, all bidders have to be careful when they keep their bids the same in each round – in case someone swoops in and bids higher for the block they are bidding the base price for.

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1:00pm

The bidding for the third phase of the auction is ongoing and the result is expected to be announced at 1:30pm.

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12:45pm

Expressing their frustration, some of the people seem to be bored with the auction drama and cannot wait to find out the result of the spectrum auction.

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12:35pm

The second phase of bidding is also complete. There has been an increase in the total bid as compared to the first phase of bidding. The results can be viewed below:



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12:30pm

The CEOs of telecom companies participate in the spectrum auction from their offices.

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12:20pm

The PTA Chairperson Syed Ismail Shah addresses the attendees at the spectrum auction.

A lot excitement and buzz can be seen at the Marriot hotel in Islamabad at this historic moment.

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12:10pm

PTA has organised the viewing of online bidding at Marriot in Islamabad. As big screens flicker with bidding activity, journalists, politicians and members of civil society gather together to witness what many called a historic moment.

The successful auction of 3G and 4G spectrums is expected to create more than 900,000 jobs in the country’s telecom sector.……………………………………………………………………………………………………………………………………

12:00pm

According to RadioPakistan, PTA has received $885 million in the first phase of bidding for the 3G and 4G auction.

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11:50am

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.

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11:40am

The auction is being carried out under the Simultaneous Multiple Round Ascending (SMRA) mechanism.

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.

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11:35am

All four bids for the 3G auction have been committed. The bidding for the auction of the 4G spectrum will now start.

More than 160 countries have already launched 3G mobile services including Afghanistan.

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11:20am:

People on twitter express disappointment over the fact that Warid - one of the main telecom companies in Pakistan - is not participating in the auction.

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11:10am

All the four existing telecom companies who had submitted bids 3G and 4G spectrum licences had qualified for the auction.

After scrutiny of submitted bids, China Mobile (Zong), PTML (UFone), Mobilink and Telenor Pakistan qualified for the bidding. Warid, the fifth local telecom operator, did not participate in the bidding process.

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11:00am

Number of active 3G subscriptions have surpassed one billion, according to experts. Third-generation mobile services is now a decade old technology.

People on twitter question why it took Pakistan so long:

10:55am

The base prices for 3G and 4G licences have been set at $295 million per 10MHz and $210 million per 10MHz respectively.

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10:50am

The first phase of the auction has begun.

In order to ensure transparency, the PTA has decided to keep the auction web-based which will not require the physical presence of the four cellular mobile operators (CMOs) participating in the bidding process.

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10:45am

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10:40am

The bidding will take place in 5 phases, each 45 minutes long.

The Pakistan Telecommunication Authority has put on sale 30MHz of spectrum in 3G [2100MHz] band and 20MHz of spectrum in 4G [1800MHz] band.