PTA: additional spectrum auction

Telecom experts have long argued over reform of spectrum policies so that redundant, yet unavailable, spectrum is reused elsewhere in the face of already limited frequency and increasing congestion on existing allocations. Now, with the facilitation of the Frequency Allocation Board, PTA has been able to free up over 600 MHz of spectrum in the 1.9 GHz and 3.1 GHz frequency bands. The PTA has decided to auction this additional spectrum to the existing operators in the fixed local loop, wireless local loop and class-value-added service (e.g. data and voice VAS, vehicle tracking, payphone, video conferencing, etc.) segments. PTA classifies the country into fourteen telecom regions, which include the metropolis of Faisalabad, Gujranwala, Hazara, Islamabad, Karachi, Lahore, Multan and Rawalpindi. The rest of the cities and districts are geographically bundled into Northern, Western and Southern telecom regions. According to PTAs Information Memorandum for the said auction, the existing FLL, WLL and CVAS operators can apply for available block(s) within the two bands in only those telecom regions for which they already hold the license. Should an operator win a block, it can only use the additional spectrum to provide those services that are authorised under the existing license within that region. In the 1.9 GHz frequency band, PTA has upto 70 MHz bandwidth available in 14 telecom regions across Pakistan. The annual spectrum fee has been fixed at $75,000 per 5 MHz block in the telecom regions of Islamabad, Karachi and Lahore. The spectrum fee is $25,000 for the available blocks in the rest of the regions. In the 3.5 GHz frequency band, there is up to 532 MHz bandwidth to be auctioned in the 14 regions. PTA would charge an annual spectrum fee of $25,000 for each 23MHz block in the telecom regions of Islamabad, Karachi and Lahore, and $10,000 for each block in the remaining regions. The base prices of the blocks vary vis-à-vis frequency band and telecom regions. For instance, the base price for a 5 MHz block in the 1.9 GHz band has been calculated at $27.45 million in the Karachi telecom region, whereas it is fixed at $2.3 million for Hazara region. Similarly, in the 3.1 GHz band, the base price for a 23 MHz block is set at $16 million for Karachi region and just $0.25 million for the Gujranwala region. The deadline for the submissions of expressions of interest (EOI) and applications is March 30, and the bidders pre-auction qualification will be held on April 11. The auction is scheduled to be held on May 3, 2012. The IM states that a successful bidder shall have to pay 50 percent of the peak price within 30 days of the PTA notification and the rest in ten annual, equivalent installments. The additional spectrum may help ease the network load for existing operators. Yet the market situation begs the question of a broad-based participation in the auction. Seven years on since the telecom deregulation, 21 FLL, 6 WLL, and 64 CVAS operators have exited the market, because they either went under or could not meet the rollout obligations. Existing operators are still on the lookout for respite. In any case, it is important that radio frequency spectrum, which is a limited national resource, be efficiently allocated to various services and users. Moreover, the reformation of the spectrum should be a continuous process, so that available spectrum could be shared, as per emerging technological and socioeconomic priorities, with the private sector.