ISLAMABAD: The Ministry of Information Technology and Telecommunication (MoITT) has decided to auction an additional spectrum of 3G/4G called Top Up spectrum of around 15 MHz to generate additional revenue of $150 million as well as improve the quality of services in the country.
Sources revealed that the ministry has sought spectrum demand for additional spectrum from telecom operators within two weeks.
Due to high prices and tough conditions, cellular operators were reluctant to participate in the last auction and therefore the government estimated revenue projection of $1 billion was missed.
A high-level meeting was chaired by Secretary IT and Telecommunications Mohsin Mushtaq Chandna in the MoITT to discuss the quality of services, consumer issues, and spectrum infrastructure requirements.
The meeting was attended by telecom operators’ executives, the PTA chairman, Frequency Allocation Board executive director, member Telecom MoITT, and other government officials.
According to sources, one of the main telecom operators has expressed interest in purchasing additional spectrum after which the MoITT has started the consultation process.
Sources revealed that Federal Cabinet would constitute a spectrum auction committee to be headed by Finance Minister. After getting approval from the Economic Coordination Committee of the cabinet and federal cabinet, the government would allow the release of additional spectrum to be mainly used for improving the quality of services.
Further, the government is expecting around Rs30 billion of non-tax revenue from the release of additional spectrum.
A meeting in this regard has reportedly been held in Pakistan Telecommunication Authority (PTA) in which all the stakeholders participated. Telecom operators say it is not just a matter of spectrum pricing but also of the terms offered by the PTA. They will have to talk to their group and consultant and only then demand will be given after looking at the terms.
The auction for additional spectrum was held last year in which only one
out of four operators participated.
The government had realised only $279 million i.e. 33 percent of the estimated amount of $831.8 million from the Next Generation Mobile Services (NGMS) spectrum auction after three cellular companies did not show interest in the process while quoting price mechanism as a major hurdle.
The government sold 70.31 percent of 1800MHz band spectrum i.e. 9MHz out of 12.8MHz. As many as 3.8MHz (excluding 6.6MHz sub-judice) in 1800MHz and 15 MHz in 2100MHz band (base price – $29 million/MHz) remained unsold.
The government had set a base price of $31 million per 1MHz for the 1800MHz band, and $29 million per 1MHz for the 2100MHz band.
The PTML (Ufone) had submitted a bid of $279 million for a 9MHz block in a 1800MHz band, and since there were no other operators participating in the auction process, the total proceeds from the spectrum auction will stand at $279 million.
Copyright Business Recorder, 2022
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