ISLAMABAD: The government is likely to face a massive blow in realisation of the non-tax revenue of $831.8 million as the Pakistan Telecommunication Authority (PTA) received only one bid for the auction of the Next Generation Mobile Services (NGMS) spectrum scheduled for September 16, 2021, it was learnt.
Sources revealed to Business Recorder that three of the four cellular operators did not submit bids for the spectrum auction of which the government had estimated $831.8 million of non-tax revenue based on base price. They said that the price mechanism and the timeline were the major issues for the telecom operators.
The PTA had stated that the estimates of revenue from spectrum auction is dependent on various factors such as: (i) if all the spectrum available for auction is sold at base price then an estimated revenue of $831.8 million is expected; (ii) however the expected revenue can vary if any spectrum remains unsold; and (iii) or the estimated revenue can be higher, if the spectrum is sold at higher than the base price through auction.
The Ministry of Information Technology and Telecommunication had issued a policy directive to the PTA for holding auction of the NGMS spectrum.
Ufone has become the only operator to have submitted its bid for the auction of spectrum, as the deadline to submit bids expired on September 9, 2021. The PTA is auctioning spectrum in 1800 MHz and 2100MHz band and since there is no other participant, Ufone is likely to get the spectrum at the base price.
The base price for 2×1 MHz (1 MHz paired) spectrum in 1800 MHz was set at $31 million, while the base price for 2×1 MHz (1 MHz paired) spectrum in 2100 MHz was set at $29 million.
Telenor spokesperson Saad Waraich told Business Recorder that mobile connectivity is the cornerstone of socio-economic progress and the availability of adequate spectrum at reasonable price and conditions is of fundamental importance for achieving the goal of ubiquitous broadband coverage in the country.
"We have always maintained that in order to make sustainable investments in a challenging and competitive business environment, the spectrum policy, pricing and rollout obligations should be reasonable, fair, and predictable. We have been closely following the spectrum auction process, and after a thorough and careful assessment, we have decided not to participate in the spectrum auction.
"We analyse all investment opportunities based on what is right for our customers and business. The existing circumstances did not present the economic viability to invest in the spectrum during this year's auction.
"Regulatory reforms, spectrum roadmap, price resetting and healthy market competition remain critical enablers to narrowing the digital gap and furthering the technological developments in the country," he added.
He further said, "as a customer-centric organisation, our focus remains on pursuing avenues that enable us to serve our customers better in the long run. We are confident that we have made the right decision. Based on our existing ability, resources, and state-of-the-art infrastructure, we shall continue to connect Pakistanis to what matters most to them".
When contacted for views on the latest development, PTA spokesperson Khurram Ali Mehran said, "Once all formalities are completed details shall be announced".
However, another senior official said that the auction was held in 2016 and 2017 with single bid. As per the PPRA rules the auction can take place, he added.
Jazz spokesperson told Business Recorder that it holds 47.2 Mhz of spectrum, which is sufficient to meet the demand for existing service offerings, while allowing it to keep pace with technological changes and evolving customers' needs.
In the last two years alone, Jazz has invested over $560 million towards an ambitious 4G network expansion plan mainly in rural and semi urban areas in a bid to empower the underserved and it will continue to do so going forward.
Jazz has a long-term commitment to Pakistan, which is evident from the level of investment that currently stands at $9.6 billion since its inception. Jazz weighs all investment opportunities keeping in view the value it brings to its customers and business.
Properly designed spectrum auctions, with reasonable pricing, fair license conditions and rollout obligations, can deliver strong socioeconomic benefits. However, after careful assessment of the Spectrum Auction 2021, Jazz has decided not to participate in it.
Copyright Business Recorder, 2021
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