First of its kind in Pakistan: 3G-4G auction fetches $1.1 billion

Published: April 24, 2014
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A woman reads a brochure of 3G and 4G of next-generation telecommunications during an auction in Islamabad. PHOTO: AFP

A woman reads a brochure of 3G and 4G of next-generation telecommunications during an auction in Islamabad. PHOTO: AFP

ISLAMABAD: 

Pakistan on Wednesday successfully completed the auction for next-generation telecom spectrums – the first of its kind in the country – raising $1.112 billion or Rs111 billion from the process.

The Pakistan Telecommunication Authority (PTA) had offered three bands for the 3G spectrum – with a total available frequency of 30MHz – and two bands for the 4G spectrum.

Out of the four competitors participating in the auction, only Zong managed to secure licences for both 3G and 4G spectrums; the other three – Mobilink, Telenor and Ufone – secured only 3G licences.

While the PTA managed to sell all three bands of the 3G spectrum on offer, it could only sell one 4G licence after Ufone – the only other bidder for the spectrum – was disqualified on technical grounds.

The $1.112 billion that the country has earned from the sale is just $17 million or 1.6% higher than the reserve price of $1.095 billion for these licences. The $210 million on account of the unsold 4G licence is excluded from calculations.

“But surely, it will usher in an era in which the country’s youth will have accesses to modern telecom services and create thousands of new jobs,” said Minister of State for Information Technology (IT) Anusha Rahman.

After the last round of bidding, PTA Chairman Dr Ismail Shah announced “all spectrums in 2100MHz (3G) have been sold.”

“But we could only sell one licence in 1800MHz (4G) as Ufone was unable to qualify,” he said.

Shah explained that a bidder only qualified to bid for the 4G spectrum after winning a minimum 10MHz in the 3G spectrum. He said that despite bidding for 15MHz in the 3G spectrum, Ufone could only win 5MHz.

CMPAK Limited, better known as Zong, bid the highest – $306.9 million – for a 3G licence in the 10MHz band, making it eligible for getting a 4G licence at a base price of $210 million.The base price for 3G was set at $295 million.

Of the total $1.112 billion earned by the government, Zong – which is fourth largest among Pakistan’s five existing telecom players – paid $516.92 million for the two licences.

“Zong is very excited for becoming the only party to win both 3G and 4G frequencies and will roll out the services at a fast pace,” said Sikandar Naqi, the adviser to the chief executive officer of Zong.

While Mobilink – the largest telecom player in the country with 29% market share – also won a licence in the 10MHz band, it opted against bidding for a 4G licence.

The final 10MHz band was divided into two 5MHz slots, one of which was won by both Telenor and Ufone each.

Mobilink paid $300.9 million for a 3G licence in 10MHz, making it the second highest bidder. Telenor and Ufone, however, got 3G licences at base price, creating suspicions of collusion. Ufone, by choosing to bid for 15MHz, had also forced PTA to break one 10MHz band into two.

Meanwhile, the PTA chairman said the decision to sell the last 4G licence will be taken soon.

“PTA’s decision to not allow Ufone to bid for a 4G licence after it failed to fulfill the requirement was a good decision… it ensured that the process remained transparent,” Finance Minister Ishaq Dar said while speaking at a news conference after the auction.

Asked whether the PTA will forfeit the money deposited by Ufone after the telecom operator won less than it had bid for, Dar said the decision will be taken after receiving input from the law ministry.

‘Govt earned more than it expected’

Talking to reporters, the finance minister said the government had earned more than it had initially estimated.

He said the government could still earn at least Rs50 billion more from the last remaining 4G licence, in addition to the Rs111 billion it had earned from the sale already. One more licence is also being kept for a new entrant, he added.

Dar said the government, by successfully conducting the auction, has established that it has the ability to fulfill the promises it has made to the nation. He said the introduction of new telecom technologies will create hundreds of thousands of new jobs.

The minister hinted at giving tax relief to users of telecom services, but said a final decision will be taken in the upcoming budget.

On issue of YouTube, he said in addition to the Supreme Court’s directives for keeping the video-sharing portal blocked until the removal of blasphemous material, Prime Minister Nawaz Sharif has also directed PTA to remove videos showing pornography and mutilated bodies of security personnel.

Published in The Express Tribune, April 24th, 2014.

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Reader Comments (28)

  • Chachoo
    Apr 24, 2014 - 3:48AM

    Now the next step by the Government should be the development of framework to monitor the progress of 3G and 4G deployment. Also government must assign atleast 10 Billion Rs of the total money to the Universities of Pakistan to develop the indigenous framework for the futuristic 5G technology

    Indigenous development should be the way forward. A part of the money earned through Auctions must be spent on Research and technology, because right now we lack basic technologies to develop any type of Communication equipment and Satellites of any kind.

    Recommend

  • Khan
    Apr 24, 2014 - 5:34AM

    Mubarak to all Pakistan and to Zong for the first ever 4G provider in Pakistan,

    Recommend

  • Faheem
    Apr 24, 2014 - 6:48AM

    Please correct typos

    He said the government could still earn at least Rs50 billion more from the last remaining 4G licence, in addition to the Rs111 billion it had earned from the sale already

    These are million not billion.

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  • Instantaneous
    Apr 24, 2014 - 7:09AM

    3G in Pakistan and India= 1G elsewhere

    Recommend

  • emola
    Apr 24, 2014 - 7:18AM

    Just 1.1 billion dollars? I thought the target was set at 4 billion dollars.

    Recommend

  • Visibly Invisible
    Apr 24, 2014 - 8:30AM

    Today, I managed to travel back in time to 2007 when 3G was the “modern technology”… Stop selling lies even war-torn Afghanistan has had 3G for quite sometime now… What a waste of resources

    Recommend

  • Ahsan J.
    Apr 24, 2014 - 9:53AM

    Ufone really missed the plot, they were DISQUALIFIED from the 4G auction. They didnt know they need to win 10Mhz spectrum (not 5Mhz) in 3G round in order to be ELIGIBLE for the 4G license.
    Heads must roll , this is a major blunder.

    Recommend

  • Necromancer
    Apr 24, 2014 - 10:21AM

    @Faheem
    I think it is billion, $1.112 billion converts to Rs 111 billion. I think ET is correct this time

    Recommend

  • Ali
    Apr 24, 2014 - 10:36AM

    It is hard for me the understand this disdain about being ‘late to the party’. Suppose these bands had been auctioned off earlier. Were there enough devices in Pakistan a couple of years back to fully utilize the higher bandwidth (or make it worthwhile for the telecom companies)? If i recall most of use were using these old phones with limited hardware.

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  • jamshed kharian-pak
    Apr 24, 2014 - 11:01AM

    Good luck Ir Pakistan

    Recommend

  • Faheem
    Apr 24, 2014 - 11:12AM

    @Necromancer
    Oops. Didn’t pay attention to the currency there.

    Recommend

  • Khan
    Apr 24, 2014 - 11:36AM

    @ Visibly Invisible I am with Ali on this one. Afgans only had 3G in there country because of the Americans and the war in Afgan. Its too bad that they are far behind in other things. Also while we are on the subjects, its time for the Afghans to go back home and leave Pakistan in peace.

    Recommend

  • Jawad Gill
    Apr 24, 2014 - 1:02PM

    What’s the point of high speed mobile internet? when you can only use limited data in between 2 to 4 GB, suppose if I pay RS.1800 for my PTCL DSL 2MB and 1000 to 1500 rupees for 3G … it’s about 3000 to 4000 rupees as a whole … and I am a working class, so can not afford it. so who cares about it … they are not going to introduce unlimited 3g internet because PTCL Broadband clientele will drop down … we belong to a third world country of crooked crowd not nation so you can expect it from so called PTA. Everyone so called pirated intellectual discussing and is comparing with other countries. Well if you compare your just DSL broadband with other developed countries than UK is offering unlimited 10MB broadband internet in just 10 pounds which is almost not more than RS.1500 and 50MB for just 50 pounds including free calls which is not more than 6 to 7 thousand rupees. Also compare it with Malaysia, india and rest of the world … so light aye gi tu mobile charge ho ga na … 3g just starting here after 3 to 4 years lol … come on cavemen internet users grow up … south korea is giving 100MB internet for just $50. I studied IT in UK and came back to serve my country but now I am hopeless. Big nations are those who accept critics and improve … We are simply a crowd who do not give way to Ambulance … urgghhh

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  • Shadow
    Apr 24, 2014 - 2:37PM

    The main difference between 3G and 4G is speed. 4G speeds can be up to 10 times faster than 3G.

    Averagestrong text download speed on a strong text3G network is between strong text600 Kbps and 1.4 Mbps with peak download speed of up to 3.1 Mbps.strong text

    On a strong text4G network the average download speed is 3-6 Mbps with peak download speed of more than 10 Mbps.
    strong text*strong text*

    Recommend

  • Mola Jatt
    Apr 24, 2014 - 3:45PM

    @Jawad Gill:

    Who asked you to come back to pak and serve it. You are not giving any favor by moving back to pak. Infact after completing your study you couldnt find a job in UK and you thought lets try my luck in Pak. There are many in Pak who got degrees from uk and serving the nation but its not a big favor they giving to Pak. So kool down mate you not the only one who got degree from uk just work your socks off and try to find a job .

    Recommend

  • Ahmad Khan
    Apr 24, 2014 - 3:55PM

    @Khan:
    Its time for Pakistan to stop its proxy war in Afghanistan thru Taliban, stop dreaming of strategic depth, and making Afghanistan its 5th province.

    Recommend

  • sam
    Apr 24, 2014 - 4:06PM

    Folks! let the process start….late than never, be optimistic :)Recommend

  • Nayyara
    Apr 24, 2014 - 5:03PM

    There’s another news that I have to give!

    Recently a survey was conducted by one of the leading research agencies where a sample of mobile users were asked to comment on the best network service and 97% of Warid customers said that they are most happy with the quality of network service provided by the company while Mobilink is second at 95%.

    Source: http://www.gallup.com.pk/pollsshow.php?id=2014-04-07

    Recommend

  • Apr 24, 2014 - 8:04PM

    what about PTCL ?

    Recommend

  • unbelievable
    Apr 24, 2014 - 9:14PM

    @Chachoo:

    government must assign atleast 10
    Billion Rs of the total money to the
    Universities of Pakistan to develop
    the indigenous framework for the
    futuristic 5G technology.. Indigenous
    development should be the way forward

    Wishful thinking – your never going to lead the pack when it comes to this technology – you don’t have the money or in-house expertise to make this a remote possibility. Heck – took you years to just auction 3G rights and whether that gets successfully rolled out is still an unknown.

    Recommend

  • Fahad Zia
    Apr 24, 2014 - 11:28PM

    Expedite all operators for this new generation technology.

    Waiting for this new era.Recommend

  • unbelievable
    Apr 25, 2014 - 12:24AM

    Afghanistan implemented 3G two years ago – congratulations on catching up.

    Recommend

  • imran
    Apr 26, 2014 - 3:49PM

    Nice comment from chachoo. Very nice idea, Pakistan must invest for 5 g from the earned amount. In 5 g we must to win from neighbors. Pta must invest in research of new technologies.Recommend

  • La
    Apr 27, 2014 - 3:55AM

    @Faheem:
    It is in pakistani rupees. So i think it is correct.

    Recommend

  • Apr 27, 2014 - 5:07PM

    haloo frndz 3g ek asy divece hai gassy humy internet ki speed taz taren ho gay gi ab ufone telenor mobilink zong ye sab ko licence mial gaya hai mubark ho all to all pakstan

    Recommend

  • Apr 28, 2014 - 7:31AM

    well very nice
    but if pakistani govt wants see pakistan on way toward develop ent at a rapid speed soo it must reduce excess taxes good & services…
    Soo that thay will be able to overcome most of the problems hirdle in their way toward development…
    The practical example here in our daily life is the excess tax on mobile credits and thats allRecommend

  • NIDA FAROOQ
    Apr 28, 2014 - 8:18PM

    World 3G and 4G map. Pakistan is far behind most countries.Recommend

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