There is no such thing as a free lunch. But Warid Telecom seems bent on having one. The fifth-ranked mobile network operator did not participate in the April 23 auction for next-generation mobile services. But, it is reportedly interested in rolling out 4G LTE services using existing spectrum in the 1,800MHz band. The four other MNOs had acquired the spectrum for 3G and 4G services for $1.112 billion last month.
Warid seems audacious. Its recent move is being viewed as smart. Whats not to like about this strategy, which might make Warid the first 4G operator in Pakistan? When folks were counting it out, Warid was keeping its cards closer to the chest. Should things go as per Warids sponsors wishes, the management would not only save a fortune on spectrum license fee, but also monetise the unused spectrum by providing premium 4G services.
But, is it Warids final act before the lights blow out? Ridden with debt and infested with losses, the 4G ploy could well be Warids last or best hope for redemption in a fast-changing market landscape. But the pathway Warid wants to traverse now is fraught with dips and bumps.
First, there are technical difficulties. On paper, the unused, surplus spectrum allows Warid the space for 4G services. But that can affect the QoS benchmarks for its nearly 13 million 2G (voice) customers. Providing 4G services can create the same condition Warid is trying to mitigate: stem the potential exodus of high-paying, discerning customers to other networks. Declining voice QoS may also invite regulatory action leading to penalties.
Secondly, there are legal issues in this approach. Pakistans arguably lax telecom regulation enforcement history is tempting, but Warid will probably wait for official approval before 4G rollout. It is arguing on grounds that the spectrum it had won in 2004 was echnology-neutral; and, therefore, it needs no new license. But, PTA has reportedly maintained that that spectrum was not service-neutral.
That implies that the 2004 spectrum was for 2G services, not 3G or 4G services, regardless of technology used (GSM, CDMA, etc.) Recall that the just-concluded spectrum auction was also not service neutral, as the auction was named "next-generation mobile services award".
Another legal lacuna is the operators compliance with regulatory benchmarks for 4G services. Also recall that the April 23 spectrum auction had clearly-defined terms and conditions, QoS parameters, rollout obligations, minimum data rate, etc., for both 3G and 4G services. Warid cannot operate in a regulation-free environment with regards to lieu of 4G services.
To sign up on 4G-related regulations, Warid has to knock on PTAs door. Reportedly, Warid has not shared any action plan yet. PTA has been playing a balancing act. It has not accommodated Warids request so far in the interest of other operators who are planning to invest heavily in 3G and 4G services after winning their respective licenses. Neither has the regulator slammed the door shut on Warid, which is a high quality operator sponsored by one of the top foreign investors in Pakistan, the Abu Dhabi Group.
Warids 4G pursuit presents technical and legal issues for the regulator, which is in a tight spot. Dr. Ismail Shah, the Chairman PTA has a visibly collaborative approach when it comes to addressing the industrys concerns. Lets see if he is able to carve out a win-win for Warid and those operators affected by its dash for relevance.
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