Partial payment: Spectrum licence winners to deposit $800 million soon

Telenor Pakistan pays remaining 50% of its licence fee.

ISLAMABAD: All four companies who secured a slice of the telecom spectrum in last week’s auction are expected to deposit 75 per cent of the total license fee, amounting to $800 million, soon, the government claimed on Monday.

The telcos are required to submit at least 50 per cent of the total license fee upfront, while they can submit remaining 50 per cent over a period of five years’ in installments with mark up of three per cent plus Libor.

On Monday, Telenor Pakistan submitted the remaining of 50 per cent licence fee of its 5 MHz band in the 2100 MHz spectrum.

China Mobile (Zong) had already announced that it would pay in full the amount for its 3G and 4G spectrum licences upfront in dollars. The amount, estimated to be around $516 million, is to be brought from outside the country.

Licenses would be issued after the spectrum auction fee is received from all four operators.

Compared to the spectrum auction for 2G in 2004, the government said the per MHz price of auction was calculated at $15 million, while this time around per MHz price was at $30 million. It is worth mentioning that the amount of spectrum in 900 MHz band which was auctioned in 2004 was 2.5 times more than spectrum auctioned in 1800 MHz this time.

Back in 2004, the operators were allowed to deposit their remaining fee in installments over 15 years without any mark up. While this time, 50% amount is being collected upfront and the remaining 50% over 5 years with a mark up of three per cent plus Libor.