License renewal fee from two CMOs: PTA receives Rs15.82bn against second installment

ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has received Rs 15.82 billion (equivalent of USD 103.17 million) against second installment of license renewal fee from two Cellular Mobile Operators (CMOs); Telenor Pakistan, and Pakistan Mobile Communication Ltd (Jazz).

The amount is being deposited in the Federal Consolidated Fund (FCF) as per practice under the Pakistan Telecom Re-organization Act 1996, said the PTA, in an official handout.

The PTA has so far deposited Rs 135.81 billion (equivalent of USD 862.22 million) with the government, received against 50 percent of total license renewal fee and first installment of the same from three CMOs.

With the amount of second installment received from two CMOs now, the total receipts on this count have become Rs151.63 billion (USD 965.39 million).

The second license renewal fee installment of CMPAK (Zong) for USD 54.086 is due in October 2021.

The government had earlier received $238.6 million (Rs 37.16 billion) as non-tax revenue from China Mobile (CM Pak) cellular company as license renewal fee.

Telenor Pakistan and Jazz had deposited $224.6 million (Rs 35.262 billion) each (half of the amount as per court direction) as their license renewal fee in September 2019.The government had approved renewal of licenses of two mobile operators, i.e. Jazz and Telenor Pakistan at around $450 million each, while the third operator - CM Pak has to pay $470 million.

Due to stay orders given by the Islamabad High Court (IHC), the collection of the renewal fee from two telecom companies had been delayed.

Cellular licenses were issued by the PTA to two new cellular mobile operators i.e. Telenor Pakistan and Warid Telecom on May 26, 2004 for a period of 15 years, under the Mobile Cellular Policy, 2004, on payment of $291 million after auction.

Cellular license of Paktel Limited, now China Mobile Pakistan (Zong), was also renewed by the PTA under the 2004 Policy on October 23, 2004 for a period of 15 years on payment of $291 million.

These licenses were due for renewal on May 25, 2019 and October 22, 2019 respectively. In 2014, the Government of Pakistan renewed the license of Ufone at $291 million.

On August 21, the IHC directed Telenor and Jazz for depositing 50 percent of license renewal fee i.e. around Rs 36 billion each in two weeks as guarantee.

The operators disagreed with the PTA’s decision on fixing license renewal fee.

The operators had also requested for grant of stay order to avoid service disruption in the country after August 21, 2019 - the date fixed by the PTA for renewal of licenses.

The court had directed both the operators to deposit half of the amount, i.e. 50 percent as guarantee till the final decision on the appeal of both cellular operators.

The PTA had rejected mobile operators’ apprehensions relating to the price of license renewal and passed an order, while fixing the fee for license renewal at $39.5 million per MHz for frequency spectrum of 900MHz and $29.5 million per MHz for frequency spectrum of 1800 MHz.

Copyright Business Recorder, 2021