Auction for 3G licence: defaulter companies allowed to participate in bidding

In a bid to generate more revenue through a tough competition among telecom companies, the government has allowed defaulter cellular companies to take part in bidding process of spectrum auction for next generation mobile services in Pakistan (3G and advanced generations), it is learnt. Official sources told Business Recorder that different telecom operators owed over Rs 26 billion to Universal Service Fund (USF) for Access Promotion Contribution (APC).
However, according to the policy directive, recently approved by Prime Minister Nawaz Sharif, all existing cellular mobile operators (CMOs) as well as new entrants will be eligible to participate in the auction. A new license for the provision of next generation mobile services will be issued to the successful bidders/auction winners and the tenure of license will be 15 years.
As per Section 3 (4) of the USF Rules, 2007, Pakistan Telecommunication Authority (PTA) shall monitor and enforce the obligations of the relevant licensees to make the USF contributions in a timely and proper manner. Therefore, PTA would act as an agent on behalf of the Ministry of Information Technology (IT) to book receivables and enforce the payment of contributions due from the operators. The main reason for the increase in amount of receivables, especially in the case of APC, was because most of the contributors had gone to courts regarding APC contributions, challenging the APC regime. PTA, being the main defendant of all allegations, is now in litigation against such operators, official sources added.
The previous National Assembly Standing Committee on Information Technology (IT) had directed the authorities concerned that defaulter cellular companies should be barred from taking part in 3G bidding process. However in the policy directives, approved by the Prime Minister, there is no bar on defaulter companies to participate in the auction process. After the formal approval of Prime Minister, the Ministry of Information Technology issued policy directives regarding spectrum auction to PTA. The PTA has been entrusted to carry out the auction in the most transparent manner in the shortest possible time. The authority has informed the government that auction will be completed by the end of February 2014. In this regard, PTA has started the process to hire the services of internationally reputed consultant(s) as directed in the policy directives.
As identified by Frequency Allocation Board (FAB), 30 MHz paired spectrum in 1.9GHz/2.1GHz band is available for auction, said officials, adding that PTA would prepare detailed guidelines in this regard with a view to providing level playing field to both existing as well as new entrant(s). Existing licensee would provide national roaming on request by any new entrant or as directed by the PTA, whichever is deemed appropriate, and as maintained in the policy directives.